DCIT(IT)-4(2)(2), MUMBAI vs. STANDARD CHARTERED BANK, MUMBAI

ITA 4247/MUM/2025Status: DisposedITAT Mumbai16 July 2026AY 2004-0591 pages
AI SummaryPartly Allowed

What were the facts?

The assessee, Standard Chartered Bank, a foreign bank operating in India, claimed substantial indirect and direct costs incurred by its overseas branches as deductible expenses. The Assessing Officer (AO) and Transfer Pricing Officer (TPO) examined these claims, particularly concerning the allocation of indirect costs and the allowability of direct costs.

What did the Tribunal hold?

The Tribunal held that the loss arising on year-end revaluation of outstanding foreign exchange forward contracts is an accrued trading loss and allowable as a deduction. Regarding direct costs, the Tribunal held that since the expenditure was incurred wholly and exclusively for the assessee's business and a substantial portion was accepted by the TPO, the disallowance of the remaining direct expenditure was unjustified.

What were the issues?

Whether indirect costs allocated by overseas branches are deductible and whether direct costs incurred for the Indian branch are allowable as a deduction when a portion has been accepted by the TPO.

Which sections of the Income-tax Act were involved?

Section 92CA,Section 37,Section 80-G

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FIT FOR PUBLICATION

आयकर अपील"य अ"धकरण, मुंबई पीठ", मुंबई INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, MUMBAI BENCH: I BEFORE HON’BLE BEENA PILLAI, JUDICIAL MEMBER AND HON’BLE ARUN KHODPIA, ACCOUNTANT MEMBER

ITA 4247 & 4275/MUM/2025 िनधा"रण वष"/Assmt. Year: 2004-05 & 2005-06) STANDARD CHARTERED BANK DCIT(IT)-4(2)(2) C 38 AND 39 G BLOCK ROOM NO.627, KAUTILYA CRESCENZO BLDG BHAWAN, BKC, BANDRA (E), BANDRA KURLA COMPLEX, Vs. MUMBAI-400051, BANDRA(EAST) MAHARASHTRA MUMBAI-400051, MAHARASHTRA (""थ" Respondent) (अपीलाथ" Appellant) Permanent Account Number of AABCS4681D Assessee:

ITA 4264 & 4265/MUM/2025 िनधा"रण वष"/Assmt. Year: 2004-05 & 2005-06) STANDARD CHARTERED BANK DCIT(IT)-4(2)(2) (E), MUMBAI-400051, MUMBAI-400051, MAHARASHTRA MAHARASHTRA

(अपीलाथ" Appellant) (""थ" Respondent) Permanent Account Number of AABCS4681D Assessee:

Shri Porus Kaka, Ld. Senior िनधा"रती "ारा/Assessee Counsel & Manish Kanth, represented by: Cousnel, instructed by Shri

ITA 4247 & 4275/MUM/2025 ITA 4264 & 4265/MUM/2025 STANDARD CHARTERED BANK Vijay Budhwani [authorised signatory of Standard

The order continues below.

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