2003 (4) TMI 2

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....nswer: In view of our judgment in the case of Citibank N.A. v. CIT decided on March 5, 2003, vide Income-tax Reference No 5 of 1994 ([2003] 262 ITR 47 (Bom)), we answer the above question No. 1 in the negative, i.e., in favour of the Department and against the assessee. "Question 11: Whether the Tribunal was right in law in holding that the maintenance expenses incurred by the bank on its ownership flat did not result in the provisions of perquisites to the concerned employees and that the said expenses should not be considered for computing disallowance under section 40A(5) of the Income-tax Act?" Answer: In view of our decision in the case of Citibank N.A. v. CIT [2003] 262 ITR 47 (Bom), the above question No. 11 is answered in the nega....

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..... In this connection, he placed reliance on the judgment of the Bombay High Court in the case of CIT v. R. Shroff Consultants Pvt. Ltd. [1999] 238 ITR 1018. He also relied upon a judgment of the Bombay High Court in the case of Insight Diagnostic and Oncological Research Institute P. Ltd. v. Deputy CIT decided on April 16, 2003, vide Income-tax Appeal No. 247 of 2001. On the other hand, Mr. Pardiwalla, learned counsel appearing on behalf of the assessee, submitted that the assessee is a non-resident banking company, having its head office at Abu Dhabi. He contended that the branch office of the bank is in Bombay and, during the assessment year in question, the assessee acquired mainstream computers which were utilised in banking business f....

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....ters were not appliances as computers constituted substitutes for human labour. That, appliances could be operated by even lay persons. Findings on question No. III: We find merit in the arguments advanced on behalf of the assessee on this point. It is, no doubt, true that the judgments cited on behalf of the assessee refer to the assessees whose business was confined to data processing for their clients. Today, we have computerised accounting in the banks. In the case of computers, which existed during the relevant assessment year and even today, the operation of the computers in principle remains the same. That, commercial data is fed into the computers as inputs as per the requirement of various customers and the data is processed to g....

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....wer the above question No. III in the affirmative, i.e., in favour of the assessee and against the Department. "Question IV: Whether the Tribunal was right in law in allowing the travelling expenses of Rs. 4,20,706 incurred on the staff members of the head office on their visit to the branch office of the assessee in India Findings on question No. IV: Section 44C is applicable only in the cases of those non-residents, who carry on business in India through their branches. The said section was introduced to get over difficulties in scrutinising claims in respect of general administrative expenses incurred by the foreign head office in so far as such expenses stand related to their business or profession in India having regard to the fact ....