Direct Head Office and overseas-branch expenditure incurred...

Direct Head Office and overseas-branch expenditure incurred specifically for an Indian branch is deductible when directly attributable and supported by invoices, rather than being treated as general Head Office expenditure subject to the statutory cap. Under the India-France DTAA, branch-to-Head Office interest is not independently taxable where paid by the Indian permanent establishment, treaty tax-rate ceilings exclude separate surcharge and cess, and refund interest is taxed at the treaty rate. Common-cost allocations must be benchmarked by a prescribed transfer-pricing method, not assigned a nil value without examining services, costs and allocation keys. ECB interest already attributed to the permanent establishment must be recomputed without double taxation.