2016 (12) TMI 500

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....stions of law for our consideration : "(i) Whether on the facts and circumstances of the case and in law, the Tribunal was right in holding that the income chargeable at special rate u/s 10(15) would be on gross basis and not on net basis? (ii) Whether on the facts and circumstances of the case and in law, the Tribunal has erred in holding that the expenses incurred at Head Office on behalf of Indian Branch of the assessee are deductible u/s 37(1) of the Act without any restrictions contained in Section 44C? (iii) Whether on the facts and circumstances of the case and in law, the Tribunal has erred in directing the Assessing Officer to tax the interest received u/s 244A at the rate as prescribed in Article 12 of D....

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....dicated in our order dated 17th June, 2015 in Income Tax Appeal No. 1430 of 2013 in respect of the same respondent assessee for the Assessment Year 199798 the question nos. (i) to (iii) as proposed do not give rise to any substantial questions of law. (c) Thus, not entertained. 4. Regarding question no.(iv) : (a) We are enable to understand how the Revenue is aggrieved by the impugned impugned order of the Tribunal. This for the reason that it holds that the interest income received from the Head Office and other overseas branches would be subjected to tax. In fact, the impugned order of the Tribunal upholds the view taken by the Assessing Officer which is approved by the Commissioner of Income Tax (Appeals) [CIT(A)]. It is the res....

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....ring before the Tribunal, the respondent assessee gave up this challenge. Consequently, the orders of the lower authorities bringing to tax the interest income received from its Head Office and other overseas branches were held to be taxable. It is in that context that the impugned order of the Tribunal held that the interest paid by the assessee to its Head Office / overseas branches would also be deductible to bring to tax the net interest income i.e. interest received less interest paid. (b) In the above view, question (v) as proposed by the Revenue does not give rise to any substantial question of law. Thus, not entertained. 6. Regarding question (vi) : (a) For the purposes of conducting its operation, the respondent assessee r....

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....ssessing Officer to consider the taxability or otherwise of the amount paid to the Regional Head Office by treating it as Head Office expenses in the context of Section 44C of the Act. (d) The Revenue is aggrieved by the aforesaid findings of the Tribunal. Mr. Tejveer Singh, learned Counsel for the Revenue submits that the amount paid is in the nature of royalty as it is for the use of information technology facility. (e) The impugned order of the Tribunal is a well reasoned order. It holds that mere taking assistance from ADPC at its Regional Head Office, cannot be held to be payment of Royalty for the use of assets. The decision of the Delhi bench Tribunal relied upon by both the Assessing Officer and also by the CIT(A) in the case ....