TaxTMI 
TaxTMI 
2022 (8) TMI 622
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.... ('the Act') by the learned Commissioner of Income Tax Appeals-55, Mumbai, ['learned CIT(A)'], for the assessment year 2012-13. 2. The sole ground raised by the Revenue in its appeal is as under: "1. Whether on the facts and circumstances of the case and in law, the CIT(A) is correct in segregating the HO/NRI/other expenses incurred at HO to a) Direct Staff expenses (Rs. 4,39,02,328/-) and treating it as fully allowable expenses and b) allocable staff expenses incurred by HO support centers and allocable general administration costs (Rs.1,77,55,059/-) and bringing only this part of the expenses under the purview of section 440 of the Income Tax Act, 1961." 3. The brief facts of the case pertaining to this issue, as emanating ....
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.... Direct Staff Cost 3,25,341 2. Staff expenses incurred by head office support centres 63,036 3. General expenses incurred by head office 68,539 Total in BD 4,56,916 Converted into INR @ 134.94 = Rs6,16,57,387/- 4. Accordingly, assessee submitted that the said expenses incurred are directly attributable to and connected with the business of the assessee and are wholly and exclusively incurred for the assessee Bank and hence allowable in terms of provisions of section 37(1) of the Act. In support of its submission, the assessee also placed reliance upon the decision of coordinate bench of the Tribunal in assessee's own case for assessment year 2000-01. The Assessing Officer vide order dated 20/05/201....
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....hit by section 44C and hence to be allowed in full as per general provisions of the Act Allocated/shared/apportioned staff costs incurred by OBD and various other Head Office Support Centers to NRI Desk (B), being the items 3 and 4 of above Table subject to verification item. 3a) in terms of direction given in para 22 above and other common head office expenses other than those A and B above (C), are to be considered within the purview of section 44C only The impugned order is set aside and the matter is restored to the file of the AO for allowing deduction accordingly. It is made clear that the AO will work out the amount deductible u/s 44C afresh as per law by considering sum total of items (B) and (C) and shall not restrict himself only ....
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....on record. We find that coordinate bench of the Tribunal in assessee's own case in ADIT v/s Bank of Bahrain and Kuwait, in ITA Nos. 6731 and 6605/Mum./2006, vide order dated 28/01/2011, for the assessment year 2002-03, while restricting the applicability of section 44C of the Act only in respect of allocable expenses and at the same time fully allowing direct staff cost, observed as under: "18. Now we come to the Direct and exclusive expenses of NRI Desk covered under category A, referred to as items 1 and 2 in Table extracted above. It is noticed that there is no disagreement on the amount allocated by the assessee and as determined by TPO, being the figures in Col. III and IV of the above table. The core of controversy is whether....
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....xclusive or non-exclusive nature. If these are shared/allocated/apportioned/non-exclusive head office expenses, then they will find their residence in the overall limit u/s 44C. On the other hand, the exclusive expenses incurred by the head office for the Indian branch shall be distinctively considered under the general provisions of the Act. It is totally immaterial to consider the place, whether in or out of India, where such expenses were incurred by the head office. If the head office incurs exclusive expenses for, say Mumbai branch of the assessee, these shall be deductible as per the general provisions of the Act, but if common expenses are incurred for the NRI Desk outside India, those shall fall within the domain of section 44C. It ....
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....e head office are not hit by section 44C and hence to be allowed in full as per general provisions of the Act; Allocated/shared/apportioned staff costs incurred by OBD and various other Head Office Support Centers to NRI Desk ('B'), being the items 3 and 4 of above Table, subject to verification item 3a) in terms of direction given in para 22 above and other common head office expenses other than those A and B above ('C'), are to be considered within the purview of section 44C only. The impugned order is set aside and the matter is restored to the file of the AO for allowing deduction accordingly. It is made clear that the AO will work out the amount deductible u/s 44C afresh as per law by considering sum total of items (B) ....