AUSTRALIA AND NEW ZEALAND BANKING GROUP LTD.,MUMBAI vs. DCIT (IT)-1(1)(2), MUMBAI
What did the Tribunal hold?
The Tribunal held that specific expenses like telecom charges and employee costs incurred exclusively for the Indian branch are not covered by Section 44C and are deductible under Section 37(1). It also held that interest paid by the Indian branch to overseas branches is not taxable in India for the relevant assessment year.
What were the facts?
The assessee, a banking group, appealed against the DRP's directions regarding transfer pricing adjustments for processing fees on guarantees and marketing support services. The assessee also contested the disallowance of certain expenses under Section 44C and the taxability of interest received from its Indian branch.
What were the issues?
The key issues were the correct method for determining the arm's length price (ALP) for international transactions, the applicability of Section 44C to specific expenses, and the taxability of interest payments between a foreign bank's branches under the DTAA.
Which sections of the Income-tax Act were involved?
Section 144C,Section 92C,Section 10B,Section 44C,Section 37(1),Section 9(1)(v)
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Cases cited in this judgment(8)Show listHide list
Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.
- Radhasoami Satsang v. CIT1,695 citing193 ITR 321 · 1992 · SC
- CIT v. Everest Kento Cylinders Ltd.304 citing58 Taxmann.com 254 · 2015 · HC
- Sumitomo Mitsui Banking Corporation v. DDIT70 citing136 ITD 66 · 2012 · ITAT
- CIT v. Emirates Commercial Bank Ltd.53 citing262 ITR 55 · 2003 · HC
- Sumitomo Mitsui Banking Corpn v. Deputy Director of Income-tax (IT), Range-2(1), Mumbai26 citing19 Taxmann.com 364 · 2012
- ACIT v. Essar Steel Ltd.8 citing50 Taxmann.com 183 · 2014
- ACIT v. Audco India Ltd.7 citing47 SOT 420 · 2011 · ITAT
- Barclays Bank PLC v. Additional Director of Income-tax, (International Taxation)4 citing100 Taxmann.com 476 · 2018
Income Tax Appellate Tribunal, “I” BENCH MUMBAI
Before: SHRI SAKTIJIT DEY, HONBLE & SHRI GIRISH AGRAWAL
PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the final assessment order passed pursuant to the directions of the Dispute Resolution Panel-1, Mumbai, (DRP) vide order dated 04.09.2018 u/s. 144C(5) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”), for Assessment Year 2014-15. 2. Grounds taken by the assessee are reproduced as under: Ground 1: Determination of the arm's length price (ALP) of the international transaction relating to processing fees received on account of guarantees issued to Indian companies based on counter-guarantee from overseas branches
2 Australia
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