2003 (3) TMI 84

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....respect of the assessment, year 1981-82, the following two questions of law have been referred to us for opinion under section 256(1) of the Income-tax Act, 1961. Question No. 1: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee-bank was not liable to be taxed in respect of the amounts credited to Interest Suspense Account being ....

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.... in sections 28 to 43A, in the case of an assessee, being a non-resident, no allowance shall be made, in computing the income chargeable under the head 'Profits and gains of business or profession', in respect of so much of the expenditure in the nature of head office expenditure as is in excess of the amount computed as hereunder, namely:- (a) an amount equal to five per cent. of the adjusted ....

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....wance for head office expenses, which will not exceed the prescribed limit and that prescribed limit is provided for by the least of the three items of expenditure mentioned in clauses (a), (b) and (c). Clause (a) refers to five per cent. of the net income whereas clause (b) refers to average expenditure and clause (c) refers to actual head office expenditure in Indian operations. In this case,....

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....s found by the Commissioner (Appeals) that in the earlier years, the assessee was allowed deduction of Rs. 13,45,492 being the least of the three items of expenditure under clauses (a), (b) and (c) of section 44C. This view has been confirmed by the Tribunal. We do not see any reason to interfere with the order of the Tribunal. The average head office expenditure allowed by the Department for thre....