Receipt of interest by foreign banks on foreign currency loans to Indian concerns was taxable on gross basis

Bank of Nova Scotia Vs ACIT (ITAT Mumbai) Conclusion: Interest income earned by a foreign bank from foreign currency loans extended to Indian corporates was taxable on a gross basis. Such income could not be reduced by attributing expenditure before the concessional rate of tax was applied. Held: In the instant case, the dispute arose from assessments of The Bank of Nova Scotia for the assessment years 1999-2000 to 2001-02. For the assessment year 2001-02, AO attributed interest costs of about ₹86 lakh to foreign currency loans advanced to Indian corporates. After attributing those costs, A...