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TMI Blog2015 (6) TMI 974X X X X Extracts X X X X X X X X Extracts X X X X ..... epted that exemption under section 10(15)(iv)(h) of the Act is to be allowed on gross interest before the Tribunal, the Revenue has proposed to above question for consideration without pointing out in any manner the basis for withdrawing the concession made before the Tri bunal. In any case in terms of section 10(15)(iv)(h) of the Act it is a self-evi dent position that interest payable by any public sector company is not to form part of the total income. Further, the Tribunal in the impugned order has relied upon its own decision in other cases to hold in favour of the respondent-assessee and the decisions in those cases have not been shown to be inapplicable to the present facts and/or disturbed in appeal - Decided against revenue Expenses incurred at the head office on behalf of the Indian branch of the assessee - deductible under section 37(1) of the Act without any restrictions contained in section 44C as per ITAT - Held that:- The Tribunal by the impugned order allowed a deduction under section 37 of the Act without in any manner being restricted by section 44C of the Act. This was on the basis of an agreed position before it that this issue stands covered by the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax Act, 1961 ( the Act ), challenges the order dated September 12, 2012 (Asst. DIT (International Taxation) v. Credit Agricole Indosuez since reported in [2013] 21 ITR (Trib) 345 (Mumbai)), passed by the Income-tax Appellate Tribunal ( the Tribunal ) for the assessment year 1997-98. 2. At the hearing Mr. Tejveer Singh, learned counsel for the Revenue, urges the following questions of law for consideration : (1) Whether, on the facts and in the circumstances of the case and in law, the Tribunal has erred in holding that interest earned on the Nostro account is taxable ? Without prejudice, if the High Court decides that the interest earned on the Nostro account is not taxable, then consequential disallowance under section 14A may be directed. (2) Whether, on the facts and in the circumstances of the case and in law, the hon'ble Income-tax Appellate Tribunal was right in hold ing that the income chargeable at the special rate under section 10(15) would be on gross basis and not on net basis ? (3) Whether, on the facts and in the circumstances of the case and in law, the hon'ble Tribunal was right in holding that the expenses incurred at the head office on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. Regarding question No. 3 The Tribunal by the impugned order allowed a deduction of ₹ 48,60,008 under section 37 of the Act without in any manner being restricted by section 44C of the Act. This was on the basis of an agreed position before it that this issue stands covered by the decision of the Tri bunal in Joint CIT v. American Express Bank Ltd. [2012] 19 ITR (Trib) 650 (Mumbai) ; [2012] 24 taxmann.com 50 (Mumbai-Trib). It is further pointed out by the respondent that the Revenue being aggrieved by the decision of the Tribunal in American Express (supra) carried the issue in appeal to this court being Income Tax Appeal No. 1294 of 2013. This court by an order dated April 1, 2015 (DIT (International Taxation) v. American Express Bank Ltd. [2015] 5 ITR-OL 153 (Bom)), dismissed the Revenue's appeal on the above issue by following its decision in CIT v. Emirates Commercial Bank Ltd. [2003] 262 ITR 55 (Bom). Accordingly, question No. 3 is not entertained as it does not raise any substantial question of law. 6. Regarding question No. 4 (a) The Tribunal by the impugned order restored the issue of the rate at which interest is to be charged to tax on Income-tax refu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al income ? (b) Mr. Pardiwala, the learned senior counsel for the respondent, con tests the submission on behalf of the Revenue and submits that in the present case the question as raised by the Revenue is not in respect of deducting the payment of interest to compute the total income but with regard to the chargeability to tax of the interest received by the Indian per manent establishment from its head office in computing the total income. It is pointed out that the Indian permanent establishment and the head office are one and the same person. It is settled position that one cannot make a profit out of oneself as held by the apex court in Sir Kikabhai Prem chand v. CIT [1953] 24 ITR 506 (SC). The impugned order of the Tribunal also places reliance upon the Special Bench decision in the case of Sumi tomo Mitsui Banking Corpn. v. Deputy DIT [2012] 16 ITR (Trib) 116 (Mumbai) [SB] ; [2012] 19 taxmann.com 364 (Mum) [SB] to hold that man cannot make profit out of himself and, therefore, the interest received by the assessee from its own head office is not chargeable to tax. (c) So far as the reliance by the Revenue on order dated April 14, 2013, of this court admitting the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces thereof, inter alia, by way of inter est on moneys lent to the permanent establishment except where the enterprise is a banking institution. (emphasis supplied) It would thus be noticed from the order of this court dated February 14, 2013, admitting the Revenue's appeal, in the case of Antwerp Diamond (supra) arose from a different factual matrix, viz., specific provision of the DTAA allowing deduction and not under the regular provisions of Income- tax Act. Thus, the fact that the appeal in the case of Antwerp Diamond (supra) is admitted would have no relevance for admitting the present appeal on the proposed question No. 5. It is also necessary to point out that the Tribunal in the impugned order has recorded the fact that the respondent-assessee has admitted before it that to bring about parity, it is not claiming any deduction of interest paid by it to its head office while computing the taxable income. (d) Accordingly, in view of the above settled position that no person can make profit out of itself, the proposed question of law not being sub stantial, is not entertained. 8. However, before we close, we cannot but observe the manner in which this appeal has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Another doctrine broached by another eminent counsel I cannot pass by without a comment. That learned counsel described the advo cate as the mere mouthpiece of his client, he told us that the speech of the counsel was to be taken as that of the client ; and, thence, seemed to conclude that the client only was answerable for its language and sentiments. Such, I do conceive, is not the office of an advocate. His office is a higher one. To consider him in that light is to degrade him. I would say of him as I would say of a member of the House of Commons he is a representative, but not a delegate. He gives to his client the benefit of his learning, his talents and his judgment ; but all through he never forgets what he owes to himself and to others. He will not knowingly misstate the law he will not wilfully misstate the facts, though it be to gain the cause for his client. He will ever bear in mind that if he be the advocate of an individual, and retained and remu nerated (often inadequately) for his valuable services, yet he has a prior and perpetual retainer on behalf of truth and justice ; and there is no Crown or other licence which in any case, or for any party or purp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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