MUFG Bank Ltd Vs ACIT (Delhi High Court)
Delhi High Court held that once the Tribunal had accorded relief and allowed a deduction, the same was liable to be necessarily made by the AO. Accordingly, order denying relief pursuant to Tribunal decision is liable to be quashed.
Facts- Vide the present petition it is contested that AO has erred in rejecting the claim of the appellant for being allowed deduction with respect to salaries paid by the appellant in foreign currency and outside India, to the expatriates of the appellant working in India, and the taxes paid by (be appellant (on lax on tax basis) with respect to such salaries, where the said salaries and taxes aggregated to Rs.9,62,39,916/-, while computing the business profits of the permanent establishment of the appellant chargeable to tax in India, within the meaning of Indo-Japan tax treaty, by allegedly invoking the provisions of section 40(a)(i) of the Act, when the restrictions envisaged in the said section are not applicable in the case of the appellant in view of the express provisions of the Indo-Japan tax treaty.
Conclusion- Held that on an ex-facie examination of the reasons assigned by the AO, we find that the opinion expressed is wholly misconceived and thoroughly untenable. Once the Tribunal had accorded relief and allowed Ground No. 6, a deduction was liable to be necessarily made by the AO.
