TaxTMI 
TaxTMI 
2020 (10) TMI 980
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....aid MA order, this Tribunal had remitted three matters to the file of the ld. AO for fresh examination on the ground that these issues were raised before this Tribunal for the first time. We find that out of the three matters remitted to the file of the ld. AO, we find that the Department is in appeal only in respect of two issues in respect of which they had raised the following grounds:- "1. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) right in deleting the addition made by the AO u/s. 41(4) of the I.T. Act, 1961 without appreciating the fact that the recovery of bad debts is out of the provisions claimed by the assessee as a charge to the Profit & Loss Account and hence taxable u/s. 41(4) of the I.T. Act, 1961. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that only the income of the foreign branches is to be included in the total income which was taxed in that foreign country without appreciating the fact that the Hon. ITAT in the case of Bank of Baroda in ITA No. 2927/M/2011 dated 25/07/2014 for A.Y. 2005-06 had held that all the income of the foreign branches shall be taxable i....
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....ed in 33 SOT 7 wherein it was clearly held that when no deduction in respect of bad debts written off was claimed u/s.36(1)(vii) of the Act, but only adjusted against the deduction allowed u/s.36(1)(viia) of the Act, the provisions of Section 41(4) of the Act cannot be brought into operation for taxing the recovery in respect of bad debts written off. We find that the ld. CIT(A) duly appreciated the contentions of the assessee and granted relief to the assessee. 4.2. We find that in the instant case, the bad debts written off did not exceed the credit balance in provision for bad and doubtful debts and the bad debts written off was not claimed as deduction u/s.36(1)(vii) of the Act in earlier years. This fact was not controverted by the Revenue before us. Accordingly, we hold that the provisions of Section 41(4) of the Act which has been invoked by the ld. AO in the instant case are not applicable at all in the facts of the instant case. We also find that the Bangalore Tribunal in the case of State Bank of Mysore had held that with regard to taxing the recovery on account of deduction being allowed u/s.36(1)(viia) of the Act, the question of invoking Section 41(4) of the Act woul....
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....hen under the relevant tax treaty, it is provided that tax "may be" charged in particular state in respect of the specified income, it is implied that tax will not be charged by the other state. It has also been held that once income is held to be taxable in a particular jurisdiction under the tax treaty, unless there is a specific mention that it can be taxed in the other jurisdiction, the other tax jurisdiction is denuded of its powers to tax the same. Accordingly, the assessee pleaded that income earned by the branches of the assessee bank located outside India is not taxable in India in the light of tax treaties between India and the respective countries where foreign branches are located as the income thereon had already been subjected to tax in the foreign countries. The ld. AO however, disregarded the aforesaid contentions of the assessee and merely placed reliance on the decision of this Tribunal in the case of Bank of Baroda in ITA No.3667/Mum/2011 for A.Y.2005-06 and held that income of the branches of the assessee would also be taxable in India. We find that the ld. CIT(A) observed that the said issue is already decided by this Tribunal in the case of Bank of India in IT....
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....ents abroad. On production of such evidence, the Assessee would be entitled to the benefit. That evidence was always available and as noted by the Commissioner of Income Tax (Appeals) and the Tribunal. In the circumstances, the authorities did nothing but follow their earlier orders based on identical facts and circumstances. The finding of fact, therefore, cannot be termed as perverse or vitiated by any error of law apparent on the face of the record. The Appeal does not raise any substantial question of law. It is devoid of merits and is, accordingly, dismissed. No costs." 5.4. From the aforesaid order of the Hon'ble Jurisdictional High Court in the case of Bank of India, it could be seen that relevant materials and information were made available before the ld. AO by the assessee in the case of Bank of India, whereas, in the instant case before us, there is absolutely no finding recorded either by the ld. AO or by the ld. CIT(A) with regard to availability of relevant information with regard to payment of taxes in foreign countries by the assessee in respect of income of the foreign branches. Hence, we find considerable force in the argument advanced by the ld. DR that this asp....