TaxTMI 
TaxTMI 
2022 (11) TMI 968
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....cation of certain mistakes which are apparent from record in the said Impugned Order. (Copy of Impugned Order attached Application). Annexure 1 to this 3. That mistakes apparent on the face of the record have crept into the order, which may kindly be rectified. Such mistakes have occurred when disposing of Grounds 4 8s 5 as follows: 3.1 GROUNDS NOS. 5 8c 6 : The Tribunal has disposed off these Grounds in paragraph 8 of the Impugned Order as follows: "8. We have already discussed the relevant facts in brief in para No. 4 hereinabove. The issue involved is as to whether interest paid by the branch office to head officer is tax deductible. In support, the assessee placed reliance on the decision of Special Bench of the Tribunal in the case of Sumitomo Banking Corporation Vs. DDIT (supra). The assessee claimed that the issue raised is also covered by the decision of Hon'ble Kolkata High Court in the case of ABN Amro Bank N. V. Vs. CIT (supra) followed in the other decisions cited by the Id. AR hereinabove. The contention of the Revenue, while supporting the orders of the authorities below, remained that the decisions relied upon by the Id. AR are distinguishable as in th....
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....ident having a PE in India and hence its income is liable to tax as per provision of IT Act as also under Indo-UK DTAA. There is no dispute that the assessee has PE in India in the form of branches. In computing the income of PE the expenses incurred are allowable subject to provisions of the IT Act. Under s. 9(1 )(v) income by way of interest payable by a person who is a non-resident where the interest is payable in respect of debt incurred or moneys borrowed and used for the purposes of business carried on by such person in India is deemed to accrue or arise in India. Therefore, the interest earned by the head office from the branch in India is also taxable in India. Special Bench of the Tribunal in the case of ABN Amro Bank NV v. Asstt. Director of IT [2005] 98 TTJ (Kol.)(SB) 295 : [2005] 97 ITD 89 (Kol.j(SB) held that payment of interest paid by the PE of a foreign enterprise to head office outside India is not an allowable deduction. Though the said case was in relation to treaty with Netherlands, there is no difference in treaty with UK treaty with Netherlands and UK are identically worded and hence as per interpretation of the Special Bench such interest cannot be allowed. ....
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.... case. 6. In the Impugned Order under examination the Ld. ITAT has held as follows: "We are also fully agreeable with the finding of the authorities below that the decision in the case of ABN Amro Bank N.V. Vs. CIT (supra) relied upon by the Id. AR having different issue is not applicable in the present case as in that case issue was as to whether interest paid by branch to its head office is subject to TDS and hence, not allowable as deduction under section 40(a)(i) read with section 195 of the Act, which is otherwise tax deductible, whereas in the present case the issue involved is as to whether interest paid by the branch office to HO is tax deductible per se or not. " 7. Because the Tribunal was bound to follow the judgement of Kolkata High Court in the case of ABN Amro Bank in the appellant's case as demanded by judicial propriety. 8. Because of Impugned Order passed by Ld ITAT a strange situation emerges which results in manifest travesty of justice. When the Third Member ABN Amro judgment of the Tribunal (97 ITD 87) is against the Appellant as for A.Y 1996- 97, it is held as applicable to the assessee's case and relied upon by the Revenue, and upheld by the T....
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....the interest paid by PE to head office on money lent by head office to PE shall not be allowed as deduction. 4. Heard rival submissions perused the order of the Tribunal and the contentions raised in the Misc. application. On going through the Misc. application we find that the contentions raised in the Misc. application suggest to recall the order of the Tribunal and re-view its order on the conscious decision taken on merits by the Tribunal. Review of its own order by the Tribunal is beyond its scope and is not permissible under the provisions of section 254(2) of the Act. 5. Hon'ble Apex Court in the case of CIT Vs. Reliance Telecom Ltd. [(2021) 440 ITR 1 (SC)] held as under:- "3.1 We have considered the order dated 18.11.2016 passed by the ITAT allowing the miscellaneous application in exercise of powers under Section 254(2) of the Act and recalling its earlier order dated 06.09.2013. 3.2 Having gone through both the orders passed by the ITAT, we are of the opinion that the order passed by the ITAT dated 18.11.2016 recalling its earlier order dated 06.09.2013 is beyond the scope and ambit of the powers under Section 254(2) of the Act. While allowing the application under....
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....fter delivering its original order and that if it had to relook/revisit the order, it must be for limited purpose as permitted by Section 254(2) of the Act; and (iii) that the merits might have been decided erroneously but ITAT had the jurisdiction and within its powers it may pass an erroneous order and that such objections had not been raised before ITAT. 6. None of the aforesaid grounds are tenable in law. Merely because the Revenue might have in detail gone into the merits of the case before the ITAT and merely because the parties might have filed detailed submissions, it does not confer jurisdiction upon the ITAT to pass the order de hors Section 254(2) of the Act. As observed hereinabove, the powers under Section 254(2) of the Act are only to correct and/or rectify the mistake parent from the record and not beyond that. Even the observations that the merits might have been decided erroneously and the ITAT had jurisdiction and within its powers it may pass an order recalling its earlier order which is an erroneous order, cannot be accepted. As observed hereinabove, if the order passed by the ITAT was erroneous on merits, in that case, the remedy available to the Assessee....