https://www.taxtmi.com/caselaws?id=203653 HC held that under the applicable tax treaty, interest paid by the Indian branch to its foreign head office is not chargeable to tax in India, as the head office is not liable under the Act for such income. Consequently, no obligation arose to deduct tax at source under section 195(1). Since tax was not deductible, the disallowance provision under section 40(a)(i) could not be invoked. The permanent establishment and head office are to be treated as separate entities for all purposes, but no TDS is required on the interest remittance. The assessee is entitled to claim deduction of the interest expenditure, and the appeal was allowed. en-us Thu, 23 Dec 2010 00:00:00 +0530 Mon, 24 Nov 2025 15:49:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=203653 HC held that under the applicable tax treaty, interest paid by the Indian branch to its foreign head office is not chargeable to tax in India, as the head office is not liable under the Act for such income. Consequently, no obligation arose to deduct tax at source under section 195(1). Since tax was not deductible, the disallowance provision under section 40(a)(i) could not be invoked. The permanent establishment and head office are to be treated as separate entities for all purposes, but no TDS is required on the interest remittance. The assessee is entitled to claim deduction of the interest expenditure, and the appeal was allowed. Case-Laws Income Tax Thu, 23 Dec 2010 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=203653