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TMI Blog2023 (1) TMI 514X X X X Extracts X X X X X X X X Extracts X X X X ..... 2020 (3) TMI 1170 - ITAT AHMEDABAD] nor has placed any contrary binding decision in its support. Thus, respectfully following the order this tribunal in own case of assessee the we hold that the foreign tax credit to the extent not allowed under section 91 of the Act will eligible for deduction under section 37 of the Act as business expense. Thus, the ground of appeal raised by the assessee is hereby partly allowed. - ITA No. 1826/AHD/2019 - - - Dated:- 20-7-2022 - SHRI WASEEM AHMED, ACCOUNTANT MEMBER And Ms. MADHUMITA ROY, JUDICIAL MEMBER For the Assessee : Shri Parin Shah, A.R For the Revenue : Shri Ravindra, Sr. DR ORDER PER WASEEM AHMED, ACCOUNTANT MEMBER: The captioned appeal has been filed at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services rendered to them. These foreign parties deducted TDS for Rs. 4,22,679 being 7% of the income received by the assessee. Accordingly, the assessee claimed that it has paid the taxes on the foreign income at the rate of 7% whereas the rate of income tax in India is 30.90% on the income. As per the assessee, it is entitled for the relief under section 91 of the Act, with respect to doubly taxed income for the entire amount of TDS deducted in the foreign country being lower rate of tax in the said country. 4.1 The assessee also submitted that provisions of section 91 of the Act have referred the income and not overseas net profit, net income or proportionate income. Therefore the rate of tax in the foreign country should be worked o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of the assessee for immediate previous assessment year i.e. A.Y. 2012-13 in ITA No. 1135/Ahd/2017 where the coordinate bench of this tribunal vide order dated 05-03-2020 decided the issue partly in favour of the assessee by observing as under: 15. We have heard the rival contentions of both the parties and perused the materials available on record before us. The assessee in the present case has earned income from the foreign country namely Afghanistan on which the TDS was deducted by the foreign parties. The assessee accordingly claimed that it has paid taxes in the foreign country at the rate of 7% which is less than the rate of tax in India. Thus the assessee claimed that it is eligible for the tax relief under section 91 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter deduction of all relief due, but before deduction of any relief due in the said country in respect of double taxation, divided by the whole amount of the income as assessed in the said country 15.2 From the above, it is revealed that the amount of tax/super tax needs to be divided by the whole amount of income to work out the rate of tax. The word used whole amount of income denotes the income which signifies after the expenses. The word gross receipts have not been used therein. Even under the normal parlance, the income denotes only to the net profit i.e. gross receipts minus the expenses. Thus in our considered view, it is the only profit which should be considered while determining the rate of tax in the foreign country and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hold that the assessee is eligible for deduction for the amount of foreign tax credit which was not allowed as tax relief under section 91 of the Act. Hence the ground of appeal of the assessee is partly allowed. 10.1 Before us, no material has been placed on record to demonstrate that the decision of Tribunal as discussed above has been set aside / stayed or overruled by the higher Judicial Authorities. Before us, Revenue has not placed any material on record to point out any distinguishing feature in the facts of the case for the year under consideration and that of earlier years nor has placed any contrary binding decision in its support. Thus, respectfully following the order this tribunal in own case of assessee the we hold that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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