Director of Income Tax New Del Vs ANZ Grindlays Bank (Delhi High Court)
Delhi High Court held that fee in respect of credit card being issued by foreign branches would not be taxable in India since amount payable by those card holders would clearly be debt incurred outside India.
Facts- The instant appeals impugn the orders of the Income Tax Appellate Tribunal [“Tribunal”] and principally raise a question of allowability of expenses incurred by the respondent/assessee for garnering FCNR deposits which were to be maintained at its Indian branches. The second question which is raised is in respect of credit card commission and with those being in relation to cards which had been issued by the foreign branches of the respondent and used in India.
Conclusion- Held the expenses were incurred for the purposes of inviting NRIs’ to open deposits in the Indian branches of the respondent assessee. The aforesaid initiative was predicated upon the circular of the RBI itself which is dated 16 October 1991. Since this was expenditure which was incurred solely for the purpose of the business of the respondent assessee in India, we find no merits in the challenge which stands mounted to the order of the Tribunal in this respect.
