Taxpayer Cannot Claim Foreign Tax Deduction Under Section 37(1) Beyond Double Tax Relief Under Sections 90/91

ITAT ruled against taxpayer's claim for deduction of foreign taxes under s.37(1) beyond credits available under s.90/91. Court held that s.40(a)(ii) explicitly prohibits deduction of any taxes on business profits, including foreign taxes. The explanation to s.40(a)(ii) only excludes relief available under s.90/91, but does not make excess foreign taxes automatically deductible. DTAAs represent sovereign agreements with negotiated taxing rights, and their prescribed mechanism under s.90/91 cannot be circumvented. The unambiguous statutory prohibition in s.40(a)(ii) prevails, precluding additional deduction under s.37(1). Appeal dismissed, upholding AO's and CIT(A)'s orders. .....

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