BANK OF INDIA,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME TAX, MUMBAI

ITA 2810/MUM/2026Status: DisposedITAT Mumbai23 September 2026AY 2021-229 pages
AI SummaryDismissed

What were the facts?

The assessee, Bank of India, filed an appeal against the order of the National Faceless Appeal Centre (NFAC) for Assessment Year 2021-22. The assessee claimed amortization of lease premium of Rs. 4,42,64,873 and, alternatively, depreciation on leasehold rights. The assessee also sought exclusion of profits from foreign branches in countries with DTAAs, amounting to Rs. 565,46,41,689, or alternatively, computation of such income as per foreign tax laws. The assessee further challenged the applicability of Section 115JB of the Income Tax Act, 1961. The Assessing Officer had completed the assessment under Section 143(3) read with Section 144B, making additions. The NFAC upheld the disallowance of lease premium amortization and the inclusion of foreign branch profits, but the assessee later received relief on the Section 115JB issue via a rectification order.

What did the Tribunal hold?

The Tribunal dismissed Ground Nos. 1(A) and 1(B). Following the Coordinate Bench's decision in the assessee's own case for Assessment Years 2016-17 and 2018-19, which in turn followed an earlier decision for AY 2015-16, the Tribunal held that the lease premium paid is capital in nature and not allowable as revenue expenditure under Section 37(1). Furthermore, rights in land were held not to constitute an 'intangible asset' as defined under Section 32(1)(ii) of the Act. The Tribunal dismissed Ground Nos. 2(A) and 2(B) by respectfully following the settled judicial precedent in the assessee's own case for preceding years. The Tribunal noted that the issue regarding the exclusion of foreign branch profits was decided against the assessee, and the alternate claim for computation under foreign tax laws was also rejected, holding that worldwide income of a resident Indian enterprise must be computed under the Income-tax Act, 1961, with credit for foreign taxes allowed under Section 90/91. Ground No. 3 was dismissed as not pressed, as the assessee had received relief via a subsequent rectification order.

What were the issues?

1. Whether the lease premium of Rs. 4,42,64,873 paid for leasehold properties is allowable as revenue expenditure (amortization) under Section 37(1) or, alternatively, if it is capital expenditure, whether depreciation under Section 32(1)(ii) is allowable on the leasehold right as an intangible asset? The assessee argued that the premium was advance rent and relied on Gujarat High Court in DCIT v. Sun Pharmaceuticals Ind. Ltd. and ITAT Mumbai in National Stock Exchange Ltd. for amortization, and Karnataka High Court in Bangalore International Airport Ltd. v. DCIT for depreciation. The revenue contended that the issue was covered by the Tribunal's own orders in preceding years. 2. Whether profits of foreign branches in countries with DTAAs, amounting to Rs. 565,46,41,689, should be excluded from total income under Section 90, or if taxable, should be computed as per foreign tax laws? The assessee sought exclusion or computation under foreign laws. The revenue relied on CBDT Notification No. S.O. 2123(E) dated 28/08/2008. Both parties agreed the issue was adjudicated against the assessee in preceding years. 3. Whether Section 115JB of the Act is applicable to nationalized banks? The assessee challenged its applicability, referencing a Special Bench ITAT Mumbai decision in Union Bank of India. The assessee later stated this ground was not pressed due to a subsequent rectification order.

Which sections of the Income-tax Act were involved?

Section 37(1),Section 32(1)(ii),Section 90,Section 115JB,Section 143(3),Section 144B,Section 154,Section 250,Section 90(3),Section 91,Section 36(1)(vii)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES, MUMBAI

Before: SHRI SANDEEP GOSAIN & SHRI JAGADISH

Pronounced: 23.09.2026

PER SHRI SANDEEP GOSAIN, JUDICIAL MEMBER:

This appeal is filed by the Assessee against the order of Ld. National Faceless Appeal Centre vide DIN: ITBA/NFAC/S/250/2025- 26/1086080643(1) dated 16-Feb-2026 for the Assessment Year 2021-22. The Assessee has raised the following grounds of appeal:

Ground 1(A) - On the facts and in the circumstances of the case and in law, the National Faceless Appeal Centre (NFAC) has erred in disallowing

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 37(1)

All 6,940 judgments and leading authorities on Section 37(1) →

Recent GST High Court judgments

Search GST case law →