Section 44AC covers only expenditure the benefit of which derived both by Head Office & Branch

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INCOME TAX APPELLATE TRIBUNAL, MUMBAI

ITA No.6891/Mum/2007 – (Assessment Year: 2004-05)

ITA No.551/Mum/2010 – (Assessment Year: 2005-06)

ITA No.4191/Mum/2010 -(Assessment Year: 2006-07)

Shinhan Bank (Erstwhile Chohung Bank)

Vs

The Deputy Director of Income-tax (International Taxation)

ITA No.7421/Mum/2007 – (Assessment Year: 2004-05)

ITA No.4576/Mum/2010 – (Aassessment Year: 2006-07)

The Deputy Director of Income-tax (International Taxation)

Vs

Shinhan Bank (Erstwhile Chohung Bank)

Date of Pronouncement: 27.06.2012

It was held that what is covered u/s.44C is the expenditure that is common in nature meaning thereby that the benefit of the said expenditure is derived both by the Head Office and the Branch. It was held that payment of salary made in the case of the assessee was to expatriate employees who were working actually with the assessee in India though the payment was made to them by the Head Office outside India. It was held that the expenditure incurred on such payment thus was incurred exclusively for the branch in India and the same was not covered within the purview of sec.44C.