For a non-resident bank, overseas data-processing costs qualify...

For a non-resident bank, overseas data-processing costs qualify as head office expenditure only where incurred outside India, constituting executive or general administration, and falling within the statutory definition; factual examination of those conditions was required. NRI desk expenditure remained disallowed. Where interest-free funds exceeded investments in exempt securities, investments were presumed funded from those sources, supporting exemption without interest disallowance. Bad-debt provision deduction must be computed before the head office expenditure deduction because it is not excluded from adjusted total income. Interest between an Indian branch and its head office or overseas branches is not taxable in India, so withholding-based disallowance does not apply; however, a deductor cannot obtain credit or refund of tax deducted absent statutory authority.

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