Direct and exclusive NRI Desk expenses incurred by head office not hit by section 44C

An identical issue has been considered and decided by this Tribunal in assessee’s own case for the assessment year 2002-03, Addl. DIT v. Bank of Bahrain & Kuwait. Respectfully following the order of this Tribunal, the direct and exclusive NRI Desk expenses incurred by head office were allowed in full as same were not hit by section 44C. However, the allocated expenses towards staff cost incurred by OBD and various other Head Office support centres to NRI Desk are to be considered as per provisions of section 44C only subject to verification and correctness of expenses as per the directions of the Tribunal for the assessment year 2002-03. Similarly, the other common Head Office expenses are also to be considered as per the provisions of section 44C only. Therefore, the Assessing Officer has to work out the amount of deduction under section 44C afresh as per law in respect of the common expenses covered under section 44C. Accordingly, the orders of authorities below are modified.