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TMI Blog2013 (11) TMI 900X X X X Extracts X X X X X X X X Extracts X X X X ..... s have been made available in the paper book starting with Ledger account of travel expenses with each relevant invoice number, nature of expenditure, amount of expenditure etc. – Section 37 cannot be invoked – Decided in favour of assessee. Interest u/s 234B – Held that:- Following Director of Income-tax (International Taxation) v. NGC Network Asia LLC [(2009) 313 ITR 187 (Bom) - When the duty is cast on the payer to deduct tax at source, on failure of the payer to do so, no interest can be charged from the payee assessee u/s 234B - As the assessee before us is a non-resident, naturally any amount payable to it which is chargeable to tax under the Act, is otherwise liable for deduction of tax at source – Decided in favour of assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch the assessee failed to furnish necessary details / vouchers. The AO further included this amount of Rs. 1.19 crore within the definition of `Head office expenses disallowable as per the limits of section 44C of the Act. The assessee s contention that section 44C is not applicable in respect of traveling expenses reimbur sed by the assesse to its head office, did not find favour with the A. O. The AO also pressed into service the mandate of section 37(1) for disallowing this expense in totality. The learned CIT(A) upheld the assessment order. 4. We have heard the rival submissions and perused the relevant material on record. It is observed that the assessee is a company incorporated in USA which set up branch office in India to provide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of section 44C cannot apply. More over it is seen that section 44C refers to common head office expenses and cannot encompass the expenses exclusively incurred by the expenses incurred by head office employees exclusively for rendering services in India, this cannot be covered within the ambit of section 44C from this angle also. head office for Indian branch. The Mumbai Bench of the Tribunal in the case of Addl.DIT (IT) v. Bank of Bahrain and Kuwait [(2011) 44 SOT 693 (Mum.)] has held so. As the amount in question represents the expenses incurred by head office employees exclusively for rendering services in India, this cannot be covered within the ambit of section 44C from this angle also. 5. Now coming to the applicabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd no.7 has become academic. 8. Ground no.8 about levy of interest u/s 234A is consequential and is disposed off accordingly. 9. Ground no.9 is about levy of interest u/s 234B. Having heard the rival submissions and perused the relevant material on record we find that the issue of charging interest u/s 234B in the present case is no moreres integrain view of the judgment of the Hon blejurisdictional High Court in the case of Director of Income-tax (International Taxation) v. NGC Network Asia LLC [(2009) 313 ITR 187 (Bom.)] in which it has been held that when the duty is cast on the payer to deduct tax at source, on failure of the payer to do so, no interest can be charged from the payee assessee u/s 234B. The same view has been reiterat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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