Tax treatment of bank transactions and foreign branch income: tribunal confirms inclusion, limits deductions and tax credits allowed

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....Disallowance under the interest-attributable rule is held unsustainable where shares are held as stock-in-trade; amortisation of lease premium is capital in nature, with depreciation to be allowed. Income of overseas branches is includible in Indian taxable income, with foreign tax credit available to the extent admissible under applicable tax treaties and domestic credit rules; computation must follow treaty and local law for credit purposes. Deductions for bad debts written off and amortisation of HTM losses are allowed; broken period interest on securities held as stock-in-trade is revenue expenditure; interest on NPAs not recognised until credited or received; loss on sale to ARC is allowable; penalty for regulatory breach by foreign branch is nondeductible under business expense rules.....