November 2018

Article 7(3), India-Japan DTAA Having regard to Article 7(3), read with Protocol thereto, of India-Japan DTAA, interest paid by Indian branch of a foreign bank to HO was allowable as a deductible expenditure

GEETA JANI | DHISHAT B. MEHTA
Chartered Accountants

7.  DCIT vs. Mizuho Corporate Bank Ltd.

ITA No.: 4711/Mum/2016 & 4710/Mum/2016

Date of Order: 13th August, 2018

A.Ys. 2007-08 & 2008-09

 

Article 7(3), India-Japan DTAA Having regard to Article 7(3), read with Protocol thereto, of India-Japan DTAA, interest paid by Indian branch of a foreign bank to HO was allowable as a deductible expenditure

 

Facts       

The Taxpayer was a bank incorporated in Japan. It was carrying on banking operations in India through its branches at Mumbai and Delhi. It had furnished its return of income for the relevant year. Subsequently, it furnished a revised return and reduced the income. During the relevant year, the branch had paid interest to Head Office (HO) on the funds that the HO had advanced to the branches in the normal course of banking business. The branch had also with

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