TaxTMI 
TaxTMI 
2026 (8) TMI 174
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....or Assessment Year 2011-2012 arising from order dated, 31/08/2016, passed by the Commissioner of Income Tax (Appeals)-56, Mumbai [hereinafter referred to as the 'CIT(A)'] whereby the Ld. CIT(A) had partly allowed the appeal of the Assessee against the Assessment Order, dated 25/03/2015, passed under Section 143(3) read with Section 144(C)(3) of the Income Tax Act, 1961 [hereinafter referred to as 'the Act']. 3. The relevant facts in brief are that the Assessee, a commercial bank, filed its original return of income for Assessment Year 2011-2012 on 28/11/2011 declaring the total income of INR. 6269,23,75,570/- which was revised on 29/03/2013 declaring total income of INR. 5456,09,08,140/-. The case of the Assessee was selected for regular scrutiny. During the assessment proceedings, a reference under Section 92CA(1) of the Act was made to the Transfer Pricing Officer (the 'TPO') on 22/10/2013 for determination of Arm's Length Price (ALP) in relation to the International Transactions with Associated Enterprises (AEs). The TPO, vide Order, dated 29/01/2015, passed under Section 92CA(3) of the Act made upwards adjustment of INR. 1,65,65,575/- in the ALP of the following Internationa....
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....s length price in respect of back office support services." 10. The relevant facts in brief are that transfer pricing addition of INR. 1,65,65,575/- was made in the Assessment Order as per Order, dated 29/01/2015, passed by the TPO under Section 92CA(3) of the Act which consisted of the following: (a) TP Addition of INR. 1,34,15,865/- on account of upwards adjustment of service fee charged by the Assessee to ICICI Bank, UK and ICICI Bank, Canada for back office support services determining ALP markup at 24.26% as against 10% adopted by the Assessee. (b) TP Addition of INR. 31,49,710/- on account of commission/fee in respect of Letter of Comfort issued by the Assessee to Monetary Authority of Singapore (MAS) for benefit of ICICI Securities Inc, USA treated it akin to a guarantee transaction. TPO determined ALP commission rate of 0.89% and computed commission amount @0.89% of exposure amount of INR. 35,59,00,000/- charged based on rate charged by the Assessee to external unrelated parties. 11. In appeal the Learned CIT(A) granted partial relief by deleting the TP addition in respect of Letter of Comfort while the TP addition in respect of bank office support s....
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....f of the Assessee that the Assessee is an Indian banking company is closely regulated by Reserve Bank of India and its activities and operations are governed by the provisions of the Banking Regulations Act 1949. As per regulatory restrictions outlined above the Assessee has not rendered such services to any of the bank's customers on a commercial scale. The Assessee is not in the business of providing back office support functions services on a commercial basis. The activities performed for the Assessee are primarily for the administrative convenience and incidental and ancillary to the control and supervision purposes. The Assessee needs to standardize the process and practices at the group level to provide uniform banking services to its customers. The Assessee submitted that comparables selected by the TPO are not appropriate keeping in view the functions performed and the services provided by the Assessee-bank to its AE with respect to the back office support functions. The comparables selected by the TPO were in different line of business and hence, are not comparable. Additionally, the Assessee submitted that the amount recovered from the AE with respect to the back offi....
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.... managing the entire outsourcing operational chain of IT and process management services. • Presence of brand • Extraordinary events • Turnover greater than 34 times of Assessee. The comparable is functionally similar to the assessee and passed all the filters proposed by the assessee as well TPO and hence, accepted as a comparable. 5. eClerx Services Limited • eClerx is a leading Indian provider of KPO services. Eclerx provides high end data analytics and customized process solutions to a host of global clients • Abnormal Growth • Extraordinary events The comparable is functionally similar to the assessee and passed all the filters proposed by the assessee as well TPO and hence, accepted as a comparable. 6. e4e Healthcare Business Services Pvt. Ltd. (Nittany Outsourcing Services Private Limited) • e4e is functionally not comparable as it is engaged in providing healthcare outsourcing services. The comparable is functionally similar to the assessee and passed all the filters proposed by the assessee as well TPO and hence, accepted as a comparable. 12.4 Thus, the TPO fi....
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....ise solutions and IT Infrastructure solutions Company is functionally different as company is engaged in development of computer software (Company's onsite development expense is INR. 55.78 crore out of total expense on staff of INR. 62.9 crore i.e. 88.68%. 3. Cosmic Global 9.81% Company is functionally different as company mainly provides medical transcription and translation (company's employee cost to sales is 36.43% and has paid translation charges of 41.30% of sales. Hence, it is shows it is outsourcing its activity and it is not a pure ITES company) 4. Infosys BPO Limited 18.50% Turnover of the company - INR. 1129 Cr In Bombay HC - Pentair Water India P. Ltd. Company was excluded on the basis of high turnover. 5. Eclerx Services Limited 56.86% Company is functionally different as company is providing data analytics and process solutions. They are third party data analytics KPO company. Net cost plus margin amounting to 56.86%, is unusually high in comparison to other companies selected by the TPO. Average 24.26% 12.8 Per contra the Learned Departmental Representative upon the Order passed by the Lear....
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.... Ltd. [2024] 160 taxmann.com 214 (Mum). The Revenue has failed to bring on record any material to show that aforesaid decision would not apply to the assessment year before us. Accordingly, we hold that the issuance of Letter of Comfort constitutes an international transaction. However, the Transfer Pricing adjustment in respect of commission for issuance of Letter of Comfort is restricted to 0.04%. The TPO/Assessing Officer is directed accordingly. Ground No. 1 raised by the Revenue is partly allowed. Ground No. 2 14. Ground No. 2 raised by the Revenue pertains to disallowance of Mark to Market (MTM) losses on forex derivatives which reads as under: "2. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in allowing assessee's appeal on market to market loss ignoring the facts that on similar Issue for A.Y. 2008-09, the Ld. CIT(A) had dismissed the appeal" 14.1. The relevant facts in brief are that during the relevant previous year the Assessee entered into derivative transactions in the course of its banking and treasury business. The Assessee consistently followed policy of accounts for the mark to market (MTM) gains/losses f....
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....rket losses are contingent liability and hence are not deductible as expenditure under the provisions of the Act. The assessee carried the matter before the ld. CIT(A) and have submitted that losses on forward contract on the last date of accounting period is allowable as deduction, even though the date of maturity of those forward contracts did not fall within the same accounting period. Reliance was placed on the decision of Hon'ble Supreme Court in the case of Woodward Governor (312 ITR 254) and the decision of Special Bench of Mumbai Tribunal in the case of Bank of Bahrain & Kuait (41 SOT 290) and CIT's order for earlier AY 2009-10, Ld. CIT allowed the issue in favour of assessee. The revenue raised the objection against the aforesaid decision of ld. CIT(A) in allowing the relief to the assessee, the matter is taken up before the Tribunal. At the outset the ld. Counsel of the assessee submitted that the issue is squarely covered by the decision of ITAT in assessee's own case for AY 2009-10 wherein it is held that Mark to Market Loss / Gain is not contingent and allowable under section 37 of the Act. The relevant findings of the Tribunal on the aforesaid issue in assessee's own ....
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.... No. 3 raised by the Revenue reads as under: "3. Whether on the facts and circumstances of the case and in law, whether Ld. CIT(A) was justified in deleting the disallowance under Rule 8D(2)(ii) ignoring the facts brought out in the assessment order that expenses of Rs. 486.02 Crores were attributable to earning of exempt income." 15.2. Ground No. 2 raised by the Assessee reads as under: "2. Expenses apportioned against income exempted under section 10(15) 10(34) and 10(35) - Disallowance under Section. 14A: INR. 45,38,14,712 On the facts and circumstances of the case and in law, the CIT(A) erred in confirming the apportionment of expenses of INR. 55,15,00,000 as against INR. 9,76,85,288 made by the Appellant to the income exempt under section 10(15), 10(34) and 10(35) of the Act by applying provision of Rule 8D(2)(iii) of the Income-tax Rules, 1962." 15.3. In the return of income for the Assessment Year 2011-2012 the Assessee-bank had claimed exemption under Section 10 of the Act in respect of income aggregating to INR. 976,85,28,796/-. Therefore, during the assessment proceedings the Assessee was required to explain as to why disallowance should n....
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....strative expenses. 15.6. Now, being aggrieved by the above action of the Learned CIT(A) both the sides are in appeal before this Tribunal. 15.7. We have given thoughtful consideration to rival submissions and have perused the material on record. We find that disallowance under Section 14A read with Rule 8D of the IT Rules in a recurring issue. Similar issue had come up for consideration before the Co-ordinate Bench of the Tribunal. Vide Common order, dated 20/02/2026 [ITA No. 1446/Mum/2016 and IT(TP)A No. 1560/Mum/2016, for the Assessment Year 2010-2011], the Tribunal disposed off the issue in the following manner: "9. Ground No. 2 of assessee's appeal: regarding disallowance under section 14A of the Act. 9.1 The aforesaid disallowance for Rs. 37,99,40,048/- was made by the ld. AO, invoking the provisions of section 14A r.w.r. 8D. The original disallowance made by ld. AO was for Rs. 506,17,00,000/- reduced by Rs. 10,32,59,952/-, as already suo-motu disallowed by the assessee in its computation of total income. 9.1 Aggrieved by the calculations and final disallowance by ld. AO under section 14A r.w.r. 8D, the assessee preferred an appeal before the l....
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....nbsp; Section 14A Disallowances c) Administrative Expenses 23.54 Total 23.54 9.3 The ld. AR further placed her reliance on the following decisions: 1. Delhi High Court in Cargo Motors (P.) Ltd. v. DCIT [2022] (145 taxmann.com 641) 2. Delhi Tribunal Special bench in ACIT vs. Vireet Investment P. Ltd. [2017] (82 taxmann.com 415) 3. Mumbai Tribunal in Sajjan India Ltd. v. Addl. CIT [2018] (89 taxmann.com 21) 14A not applicable on stock-in-trade 1 Supreme Court in Maxopp Investment Ltd. v. CIT [2018] 402 ITR 640 (SC) 2 Delhi High Court in PCT v. PNB Housing Finance Ltd. [2023] 146 taxmann.com 445 (SLP dismissed by Hon'ble Supreme Court- [2023] 157 taxmann.com 465) ITAT order in own case for A.Y. 2009-10 and earlier years 9.4 It is submitted that the identical issue, when came up before the ITAT, Mumbai in assessee's own case, the ITAT has held as under: "21. We have considered the rival submissions of both the parties and have gone through the orders of lower authorities carefully. So far as grounds of appeal raised by revenue is concerned, we find that it has been con....
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....P. Ltd.. 9.7 In result, Ground No. 2 of the assessee's appeal stands allowed for statistical purposes. " 15.8. On perusal of the above we find that the Tribunal has remitted the issue of computation of disallowance under Section 14A read with Rule 8D(2)(iii) of the IT Rules back to the file of the Assessing Officer for verification of computation of administrative expenses in terms of filed by the Assessee. We note that identical computation has been filed by the Assessee for the Assessment Year 2011-2012 and the same is set out herein under: Particulars March, 2011 Opening Investment Shares (equity and preference) 1,144.00 Subsidiaries and/or joint ventures 2,619.35 Venture funds 1,167.06 Total -a 4,930.41 Closing Investment Shares (equity and preference) 1,081.64 Subsidiaries and/or joint ventures 2,870.95 Venture funds 977.65 Total -b 4,930.23 Average Investment (a+b)/2 4,930.32 Section 14A disallowances c) Administrative expenses (0.5&) 24.65 Total 24.65 Notes: 1. Securities not e....
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....rit as decided by the Hon'ble SC. 6. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in allowing the depreciation on leased assets without appreciating the fact that the said transaction being a financial lease transaction, the assessee did not satisfy the legal requirement of ownership of the assets for the purpose of Section 32(1) of the IT Act 1961 and therefore not entitled for claim of depreciation on the leased assets." 16.1. For the relevant assessment years the Assessee had claimed depreciation of INR. 16,02,19,025/- on leased assets which was disallowed by the Assessing Officer. However, in appeal preferred by the Assessee the Learned CIT(A) deleted the aforesaid disallowance made by the Assessing Officer holding as under: "5.4 As regards the allowability of depreciation on leased assets, the Apex Court in the case of ICDS vs CIT (350 ITR 266) had decided in principle that depreciation allowance would be allowable to the lessor in a bona fide lease transaction. With reference to the facts of the Appellant's case, the Mumbai Tribunal in its own case for A.Ys. 1996-97 to 2002-03 and in the case of the erstwhile....
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....s carefully as well as the order of Tribunal on this issue in earlier years. We find that ld. CIT(A) while allowing relief to the assessee followed the order of Hon'ble Supreme Court in ICDS vs CIT (supra). Further, similar relief was allowed in assessee's group case in ICICI Personal Financial Services Ltd., which was later on amalgamated with the assessee. We find that on similar issue the assessee have been consistently allowed relief on similar issue including in appeal for A.Y. 2008-09 wherein order of earlier years was followed. Thus, we do not find any merit in the grounds of appeal no. 9 & 10 revenue's appeal. In the result, ground no. 9 & 10 of revenue's appeal are dismissed." 13.3 Since the facts of the present issue are identical to the facts of appeal in assessee's own case for AY 2009-10 and relief is granted by ld. CIT(A) following the decision of Hon'ble Supreme Court in case of ICDS vs. CIT (supra), therefore the decision of ld. CIT(A) cannot be found at fault so as to revisit the same. We, thus do not find any substance in the ground of appeal no. 7 & 8 raised by the revenue in the present appeal, the same are accordingly dismissed." 16.4. We find that ....
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....siness and commercial rights acquired at the time of merger of Anagram Finance Limited. The rights were in the nature of branch network and retail business. Thus, the total depreciation claimed by the Assessee on goodwill/intangible rights was INR. 804,39,00,264/- working of which is as under: I. On merger with The Bank of Rajasthan (BOR) Amount (INR.) Market value of shares allotted to shareholders 3292,95,63,759 Net assets taken over 90,44,18,575 Goodwill 3202,51,45,184 II On merger with Anagram Finance Limited INR. WDV as in Books (As per Tax Audit Report) 15,04,55,872 Total Goodwill 3217,56,01,056 Depreciation @ 25% 804,39,00,264 WDV as on March 31, 2011 2413,17,00,792 17.2. The Assessing Officer disallowed the depreciation of INR. 804,39,00,264/- claimed on goodwill/intangible rights acquired by the Assessee on the ground that goodwill is not an asset falling under Explanation 3 to Section 32(1) of the Act. 17.3. In appeal preferred by the Assessee, the Learned CIT(A) accepted the contention of the Assessee and allowed Assessee's claim for dep....
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....sing Officer the Learned CIT(A) had relied upon the judgment of Hon'ble Supreme Court in the case of Commissioner of Income Tax, Kolkata Vs. Smifs Securities Ltd. : [2012] 348 ITR 302 (SC). On perusal of the aforesaid judgment, we find that the Hon'ble Supreme Court had held that goodwill is an asset falling under Explanation 3(b) of the Section 32(1) of the Act. The relevant extract of the judgment of the Hon'ble Supreme Court reads as under: "2. It was further explained that excess consideration paid by the assessee over the value of net assets acquired of YSN Shares and Securities Private Limited [Amalgamating Company] should be considered as goodwill arising on amalgamation. It was claimed that the extra consideration was paid towards the reputation which the Amalgamating Company was enjoying in order to retain its existing clientele. 3. The Assessing Officer held that goodwill was not an asset falling under Explanation 3 to Section 32(1) of the Income Tax Act, 1961 ['Act', for short]. We quote herein below Explanation 3 to Section 32(1) of the Act: "Explanation 3.-- For the purposes of this sub-section, the expressions 'assets....
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....ding of fact referred to hereinabove. 8. For the afore-stated reasons, we answer Question No.[b] also in favour of the assessee." 17.8. In view of the above we do not find any infirmity in the order passed by the Learned CIT(A) on this issue. As regards, the contention of the Revenue that there was no intangible asset, we note that no such reasoning was given by the Assessing Officer while rejecting the Assessee's claim for depreciation on goodwill. In any case we note that the BoR was merged with the Assessee pursuant to the provision of Section 44A of the Banking Regulations Act and was approved by the Reserve Bank of India. Bank of Rajasthan was having branches all over India with prominent presence in Rajasthan having specialised forex and industrial finance branch. As per the valuation report there were 468 branches and office of BoR in India. At the time of merger the business of BoR was intended to be continued on a 'going concern' basis. The Assessee has taken a position that the goodwill was attributable, inter alia, to this branch network. For the aforesaid reasons that the RBI has approved the exchange ratio after considering the valuation report. Therefore, ....
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.... appeal before this Tribunal. 18.3. We note that identical issue had come up for consideration before the Mumbai Bench of the Tribunal in the case of the Assessee in the preceding assessment year. Vide Common order, dated 20/02/2026 passed in ITA No. 1446/Mum/2016 and IT(TP)A No. 1560/Mum/2016, for the Assessment Year 2010-2011, the Tribunal decided the issue in favour of the Assessee and accepted Assessee's claim for deduction of ESOS expenses holding as under: "15. Ground No. 10 of revenue's appeal: Disallowance of Employees Stock Option Cost (ESOS) Expenses. 15.1 During the assessment proceedings the assessee vide letter dated 21.02.2014 had claimed a deduction of Rs. 79.21/- Crore, being the difference between exercise price and market value of the stock options offered by it to its employees. As the claim has been made during the course of assessment proceedings, the ld. AO denied the same following the decision of Hon'ble Apex Court in the case of Goetze India Pvt. Ltd. [284 ITR 323]. 15.2 The issue was raised before the FAA relying upon the decision of Hon'ble Supreme Court in the case of Jute Corporation of India Ltd. vs. CIT [187 ITR 688] and ....
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....lore Tribunal (SB) in case of Biocon Limited v. DCIT, LTU [2013][35 taxmann.com 335) 3. Mumbai ITAT in Kotak Mahindra Bank Ltd. vs. Dy. CIT [2025] (171 taxmann.com 420) (ITA No. 3754, 4104/Mum/2023) 4. Mumbai ITAT in HDFC Bank Ltd. vs. Addl. CIT/ Dy. CIT [2025] (171 taxmann.com 47) 15.5 We have considered the rival submissions and perused the material available on record and the judicial pronouncements relied upon by the assessee. In the context of aforesaid ground raised by the revenue, we find that the identical issue has come up before Mumbai Tribunal in the case of Kotak Mahindra Bank vs. DCIT (supra), wherein it is categorically held that the discount of issuance of ESOPs is allowable business expenditure under section 37 of the Act. The relevant findings from the said decision are culled out as under: "27. Rewarding employees through share-based benefit schemes has been an effective tool for the companies to not just recognize their contribution to the company but also retain them by imbibing a sense of belonging and ownership. One such scheme, popular among the companies for almost last two decades, has been to grant of Employee Stock Opti....
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....Learned CIT(A) on this issue. Accordingly, Ground No. 10 raised by the Revenue is dismissed. Ground No. 11 19. Ground No. 11 raised by the Revenue relates to disallowance of expense on issue and discount of rupee and foreign currency bonds amounting to INR. 6,00,410/- and the same read as under: "11. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in directing the AO to allow the claim for expenses on issue and discount of Rupee & Foreign currency bonds amounting to Rs. 6,00,410/-, When appeal against the issue has been filed before the ITAT and the issue has not reached finality." 19.1. The Assessing Officer in Assessment Year 2002-03 had disallowed expenses on issue and discount of rupee and foreign currency bonds on the ground that the discount on rupee and foreign currency loan is to be spread over the period of the debentures/bonds as per decision of the Supreme Court in case of Madras Industrial Investment Corporation (225 ITR 802). The Assessee had accordingly claimed INR. 6,00,410/- in the current assessment year following the said decision. The Assessing Officer did not allow the claim of the Assessee of expenses on....
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....f ld. CIT(A). 16.3 In result, ground no. 11 of the revenue in absence of any substantial material to convince us to deviate from the decisions of Tribunal stands rejected. 19.4. The Revenue has failed to bring on record any material to show that the above decision of the Tribunal is distinguishable either on facts or in law. Therefore, respectfully following the same, we decline to interfere with the order passed by the Learned CIT(A) on this issue. Accordingly, Ground No. 11 raised by the Revenue is dismissed. Ground No. 12 20. Ground No. 12 raised by the Revenue relates to disallowance of club expenses amounting to INR. 37,04,712/- and the same read as under: "12. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in deleting the addition made on account of payment of membership fees to clubs without appreciating the fact that the benefit of the above expenses are enduring in nature and hence cannot be treated as revenue expenses." 20.1. The contention of the Revenue is that the club membership fees amounting to INR. 37,04,713/- is capital in nature and the Assessing Officer was correct in disallowing deduction fo....
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....ssessee also relied on the decision of Hon'ble Bombay High Court in case of Otis elevators company India Ltd reported in 195 ITR 682. The Ld.AR however dismissed the claim of the assessee by treating the expenditure to be capital in nature. 25.2. On an appeal before the Ld. CIT(A) the claim of the assessee was allowed by following the order of the preceding assessment years on similar facts and circumstances. Aggrieved by the order of the Ld. CIT(A) revenue is in appeal before this Tribunal. 25.3. The Ld. DR relied on orders passed by the Ld.AO. 25.4. The Ld.AR on the contrary relied on coordinate of this Tribunal in assessee's own case for assessment year 2007-08 (supra) as well as observations of the Ld. CIT(A) for the year under consideration. We have submissions advanced by both sides in the light of the records placed before us. 26. In assessee's own case for assessment in 2007-08 (supra), this Tribunal followed the ratio of Hon'ble Bombay Court in case of Otis elevators company India Ltd (supra). We therefore do not find any infirmity in the view taken by the Ld.CIT(A) and the same is upheld." 17.4 Since the aforesaid issu....
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....hat if broken period interest paid on purchase of HTM securities to the tune of INR. 202,51,21,256/- is treated as capital then the broken period interest received of INR. 197,61,81,444/- on sale of HTM securities during the above-mentioned assessment year should be treated as a capital receipt and not brought to tax. The Assessing Officer without considering the aforesaid submission of the Assessee disallowed the broken period interest paid on HTM securities amounting to INR. 202,51,21,256/- treating the same as capital expenses and taxed the interest received on sale of such securities of INR. 197,61,81,444/-. 21.3. In appeal preferred by the Assessee the Learned CIT(A) overturned the decision of the Assessing Officer and allowed deduction for broken period interest as claimed by the Assessee. 21.4. Being aggrieved, the Revenue has carried the issue in appeal before this Tribunal by way of Ground No. 13. 21.5. On perusal of the order passed by Learned CIT(A) we find that the had made following observations while allowing the grounds raised by the Assessee and accepting Assessee's claim for deduction for broken period interest on HTM securities amounting to INR. 202,51,21....
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....reme Court that the securities held by the banks constitute their stock-in-trade or investment and consequently the loss claimed by the banks on the valuation of their securities should be allowed as a deduction in computing the taxable profits." 5.14 xx xx. 5.15 The Bombay High Court in American Express International Banking Corporation us. CIT (258 ITR 601) has distinguished the Supreme Court decision in the case of Vijaya Bank and relying upon the Apex Court decision in the case of Cocanada Radhaswami Bank Limited (57 ITR 306) has allowed the claim of deduction of broken period interest. The Honourable High Court has held as under: • The assessee's method of accounting does not result in loss of tax revenue for the department. There was no need to interfere with the method of accounting adopted by the assessee bank. • The judgement in case of Vijaya Bank (supra) had no application to the facts of the case. • Having assessed the income under section 28 of the Act, the department ought to have taxed interest for broken period received and the department ought to have allowed deduction for broken period interest paid. ....
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.... taxed the interest received on sale of securities amounting to Rs. 197,61,81,444 which was offered to tax by the Appellant resulting in an inconsistent stand taken by him on the said issue. 6.5 As per Section 6 of the Banking Regulation Act, 1949, banks can engage in the business of buying and selling securities, however the banking company is under the legal obligation to keep certain percentage of the securities to meet its Statutory Liquidity Requirements (SLR) It is now settled by the Supreme Court and a series of High Court decisions that the securities held by banks constitute their stock in trade and consequently the loss claimed by the banks should be allowed as a deduction from the taxable profits. The Hon'ble Supreme Court in CIT vs. South India Bank Ltd. 249 ITR 304 has affirmed the decision of the Kerala High Court and has held that the interest paid for the broken period would constitute an allowable outgo in the hands of the assessee bank and is an admissible deduction in the computation of total income of the bank under the head "profits and gains of business or profession". The Bombay High Court in the case of American International Banking Corpn. Vs. ....
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....umbai 15. Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in directing the AO to examine the claim of the assessee as per Section 90/91 of the Act, when under the I.T. Act, 1961 and DTA, the local taxes paid in foreign country with which India has entered into an agreement is not allowed. 16. Whether on the facts and in the circumstances of the case and in law, the Ld.CIT(A) erred in directing the AO to examine the claim of the assessee as per Section 90/91 of the Act relying on the decision of Karnataka High Court in the case of Wipro Ltd. (341 ITR 385) which the department has not accepted." 22.1. The Assessing Officer did not allow the deduction claimed by the Assessee under Section 37 of the Act in respect of state and city taxes paid by its USA Branch on the ground that the said claim was made vide revised computation filed during the course of assessment proceedings and not made vide a revised return and hence not permissible as per decision of the Supreme Court in the case of Goetze India Pvt. Limited (284 ITR 323). In appeal preferred by the Assessee, the Learned CIT(A) admitted the additional claim of the Asses....
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.... that the power of the AAC is co-terminus with that of the ITO and the Appellate Authority while hearing appeal against the order of the subordinate authority has all powers which the original authority may have in deciding the question before it. Following the said decision as well as the decision of the Bombay High Court in the case of Pruthvi Brokers and Shareholders in ITA No. 3908 of 2010, I hereby permit the additional ground regarding deduction claimed on State and City taxes paid by the USA branch of the Appellant. 13.5 In context with merits of the case, the AO is directed to examine and allow the claim of the Appellant as per provisions of section 90/91 of the Act following the decision of the Karnataka High Court in the case of Wipro Limited." 22.2. On perusal of the above, we find that the Learned CIT(A) has restore the issue to the file of the Assessing Officer with the directions to examination. Therefore, we do not find any infirmity in the directions issued by Learned CIT(A). It is clarified that the Assessing Officer would be at liberty to adjudicate the issue as per law. In view of the aforesaid, Ground No. 14 to 16 raised by the Revenue are partly all....
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....82,156/- in the aforesaid assessment year. In appeal preferred by the Assessee, the Learned CIT(A) reversed the decision of the Assessing Officer and allowed deduction for provisions of expenses. As a result, the Revenue has carried the issue in appeal before this Tribunal. 24.2. We note that identical issue had come up for consideration before the Co-ordinate Bench of the Tribunal. Vide Common order, dated 20/02/2026 [ITA No. 1446/Mum/2016 and IT(TP)A No. 1560/Mum/2016, for the Assessment Year 2010-2011], the Co-ordinate Bench of the Tribunal decided the issue in favour of the Assessee and allowed Assessee's claim for deduction for provision for expenses by, inter-alia, relying upon the judgment of Hon'ble Karnataka High Court in Subex Ltd. vs. DCIT in ITA No. 787/2017 holding as under: "10. Ground No. 3 of assessee's appeal regarding disallowance of provisions for expenses. 10.1 On this issue the provision for expenses on which no tax has been deducted at source were considered to be non-entitled for deduction by the ld. AO and accordingly an addition of Rs. 133,74,36,609/- was made. The issue was carried before the First Appellate Authority (FAA), who had co....
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....rred during the year as has been claimed as at 31st March of relevant financial year. If the liability is arisen in the accounting year, deduction should be allowed although the liability may have to be quantified and discharged at future days. It should be capable of being estimated with reasonable certainty though actual quantification may not be possible. We further find in assessee's own case for A.Y. 2008-09 (supra), similar relief was allowed to the assessee on the basis of decision of Karnataka High Court in Subex Ltd. vs DCIT in ITA No. 787 of 2017 and held that provision was made at the year end on estimate basis cannot be denied. We find that assessee is in a business of banking and all such provision are integral part of business activities. Thus, following the order of co-ordinate bench in A.Y. 2008-09 and the decision of Karnataka High Court in Subex Ltd. (supra), we direct the assessing officer to delete the entire addition. In the result, ground no. 3 of appeal of assessee is allowed." 10.3 The ld. CIT-DR per contra vehemently supported the orders of revenue authorities. 10.4 We have considered the rival submissions, perused the material available o....
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.... case, the Ld.CIT(A) erred in holding that the comfort letter/corporate guarantee given to the Monetary Authority of Singapore on behalf of its AE does not constitute to be an International Transaction, without appreciating the amended provisions of Section 92B(1) Explanation (c) of the Income tax Act." 27.2. The Assessee has raised the following grounds of appeal: "1. Adjustment as per Transfer Pricing Order under section 92CA(3) - INR. 3,15,29,990 [Paras 2 to 2.80, pages 2 to 8 of the CIT(A) order] On the facts and circumstances of the case and in law, the CIT(A) erred in upholding the comparables taken by the Transfer Pricing Officer [TPO] vide his order dated January 29, 2016 passed under section 92CA(3) of the Act and confirming the adjustment made to the arm's length price in respect of back office support services." 27.3. On account of parity for facts and adopting the reasoning given while disposing off the corresponding grounds raised in appeal for the Assessment Year 2011-2012 in paragraph 9 to 13.1 above, and (a) Ground No. 1 raised by the Revenue is partly allowed and (b) Ground No. 1 raised by the Assessee the Assessee is allowed. Gr....
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....d raised by the Assessee in appeal for the Assessment Year 2011-2012 in paragraph 24 to 24.3 above, Ground No. 3 raised by the Assessee in appeal for the Assessment Year 2012-2013 is allowed. In result appeal preferred by the Assessee is partly allowed. ITA No. 5512/Mum/2017 Ground No. 1 & 2 30. Ground No. 1 & 2 raised by the Revenue have already been disposed while adjudicating Ground No. 1 and 2 raised by the Assessee, respectively, hereinabove. Ground No. 3 to 5 31. Ground No. 3 to 5 raised by the Revenue are related disallowance of depreciation on leased assets of INR. 13,30,29,555/- which read as under: "3. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was justified in deleting the disallowance on account of Depreciation of Leased Assets when the assets were not actually owned by the assessee and leased out, but the transaction was in the nature of finance only. 4. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) was right in disregarding the ratio decided in the case of Damodar Valley Corporation vs. State of Bihar (12 STC 102) and Sundram Finance Ltd vs. State of Ke....
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....10 raised by the Revenue are related disallowance of depreciation on goodwill of INR. 6,03,29,25,198/-. "8. Whether on the facts and circumstances of the case and in law the Ld.CIT appointed date Bank of Rajasthan' did not have any asset and property as goodwill or such intangible asset in its accounts which could become a subject matter of transfer or vesting of asset to assessee. 9. Further whether, while giving direction for amalgamation, High Court was not shown to have ordered to pay any specific amount for such goodwill, it could not be accepted that assessee incurred any additional cost on account of goodwill. 10. Whether claim made by assessee with regard to goodwill, which was only a fictitious asset in hands of assessee, and also claim of depreciation were neither bona fide nor tenable." 34.1. On account of parity for facts and adopting the reasoning given while disposing off the corresponding grounds raised by the Revenue in appeal for the Assessment Year 2011-2012 in paragraph 17 to 17.9 above, Ground No. 8 to 10 raised by the Revenue in the present appeal are dismissed. Ground No. 11 35. Ground No. 11 raised by the Revenue is rel....
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....case of Wipro Ltd. (341 ITR 385) which the department has not accepted." 37.1. The Assessee during the course of assessment proceedings vide letter dated 12/02/2016 revised its claim of relief under Section 90/91 to INR. 156,38,21,979/- as against INR. 155,67,05,700/- claimed in the revised return of income. The Appellant also revised its TDS claim as per the latest Form 26AS and TDS certificates to INR. 127,80,88,932/- as against INR. 127,78,89,442/- claimed in the revised return of income. The Assessing Officer did not consider the revised claim of TDS and relief under Section 90/91 of the Assessee by placing reliance on the decision of the Supreme Court in the case of Goetze India Pvt Limited (284 ITR 323). 37.2. In appeal preferred by the Assessee, the Learned CIT(A) admitted the additional claim of the Assessee and restore the issue back to the file of Assessing Officer with certain directions. The relevant extract of decision of Learned CIT(A) reads as under: "11.4 I have gone through the facts of the case and the submissions of Appellant. With respect to whether a claim can be made after filing of the return of income, the Supreme Court in the case of Jute Cor....