TaxTMI 
TaxTMI 
2026 (8) TMI 1338
X X X X Extracts X X X X
X X X X Extracts X X X X
....er: 1:0 Re.: Not considering the amounts other than direct staff costs incurred vis-à-vis NRI Desk Expenses allowable under section 37(1) of the Income-tax Act, 1961: 1:1 The Commissioner of Income-tax (Appeals) ["CIT(A)"] has erred in not considering the amounts other than direct staff as allowable u/s. 37(1) of the Income-tax Act, 1961. 1:2 The Appellant submits that considering the facts and circumstances of its case and the law prevailing on the subject the limits as defined u/s. 44C of the Income-tax Act, 1961 do not apply to the aforesaid NRI Desk expenses and the amount of Rs. 2,52,61,883 is allowable as such. 1:3 The Appellant submits that the Assessing Officer be directed to consider the a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Act. Accordingly, the NRI Expenses of the assessee, which does not pertain to direct staff cost and other cost are considered to be allowable under the limits of section 44C of the Act only. The assessee being dissatisfied with the decision of Ld. CIT(A) had filed the present appeal before us. 5. At the outset, it is submitted by the ld. Counsel of the assessee that the sole issue herein which is addressed to the Tribunal is regarding allowability of certain NRI Desk Expenses to the extent of Rs. 2,52,61,883/- which should be allowed u/s 37(1) of the Act and are not subjected to the limits as defined u/s 44C of the Act. 6. On perusal of the order of Ld. CIT(A), we find that the NRI Desk Expenses are bifurcated into two categories; (1....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... High Court on this issue and request that to set aside the issue back to the file of A.O. to be decided in accordance with the decisions of Hon'ble Bombay High Court following the provisions of Section 158A(B) of the Act, wherein the assessee has filed Form no. 8A stating that identical question of law as pending before the Hon'ble High Court in the case of assessee for the A.Y. 2022-23 and several other assessment years, therefore the issue for this year may also be restored back to the file of A.O. 8. Per contra, learned D.R. vehemently, supported the orders of Revenue Authorities and submitted that the issue pertaining to allowability of expenditure which falls under clause (iv) of Section 44C of the Act, cannot be allowed u/s 37(1) ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d decision, the Tribunal, after considering the aforesaid issue and taking into account the decision of the Hon'ble Supreme Court in the case of American Express Bank Ltd. (supra), has held as under: "22. Thus, we are of the considered view that in the present case, the fact that the assessee's overseas branches had set up infrastructure at its branches for NRI Desks with separate staff and office space, which leads to the receipt of NRI deposits by the Indian branch, cannot lead to the conclusion that the expenses as enumerated in the foregoing paragraphs are in the nature of marketing expenses. These expenses, such as salaries of staff, office rental, courier and postage charges, telephone, telex and fax charges, electricity ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sent case, as no outside agency is involved, and the assessee's own overseas branch employees conducted general banking business from the infrastructure at the branch. This fact is further evident from the details of expenditure as certified in the sample local accountant's certificates, which also do not indicate any marketing/sales expenditure being incurred by the overseas branches in respect of the NRI Desks. Thus, we are of the considered view that the decision of the Special Bench relied upon by the assessee is factually distinguishable. 24. Since in the present case, it is undisputed that these expenditures were incurred outside India, accordingly, we are of the considered view that the tripartite test laid down by t....