Powers of ITOs under section 142(1) of Income Tax Act, 1961.

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..... determining the admissibility of the head office expenses claimed by the Indian branches, has been examined by the Board in consultation with the Ministry of Law. 2. A reference to the Ministry of Law was made in the case of IBM, where a similar question had arisen for consideration. A copy of the advice of the Ministry of Law is enclosed (annex I). It will be seen that the Ministry of Law are o .....

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..... from the decision of the High court are enclosed (Annex.II). 4. In short, the ITO has powers under section 142(1) to call for the books of account of the head office in order to examine the claim made by the Indian branch. However, it is necessary that only those books of account should be called for which are relevant for assessment and that there must be evidence to show that there has been a .....

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