Case Law Details

Case Name : MUFG Bank Ltd Vs ACIT (ITAT Delhi)
Appeal Number : ITA No. 8112/Del/2018
Date of Judgement/Order : 12/10/2022
Related Assessment Year : 2014-15

MUFG Bank Ltd Vs ACIT (ITAT Delhi)

ITAT Delhi held that that the salary paid by the head office to expatriate employees working in Indian branches is allowable as deduction under section 37 of the Income Tax Act.

Facts-

The assessee is a non-resident banking company incorporated in Japan and is a tax resident of Japan. In the year under consideration, the assessee had paid an amount of Rs.45,42,62,938/- towards salaries to the expatriate employees and taxes paid thereon. It was claimed as deduction, being expenditure incurred by the head office for the business operations of Indian Branches.

AO called upon the assessee to justify, how the deduction claimed can be allowed u/s. 37 of the Act. AO disallowed assessee’s claim of deduction. Learned DRP relying upon the direction in assessee’s own case in assessment year 2013-14, endorsed the view expressed by AO.

Conclusion-

Held that in identical issue relating to the claim of deduction of salary paid to expatriate employees working in Indian branches came up for consideration before the Tribunal in assessee’s own case in assessment years 2007-08 and 2008-09. While deciding the issue, the Tribunal decided in favour of the assessee by holding that the salary paid by the head office to expatriate employees working in Indian branches is allowable as deduction.

FULL TEXT OF THE ORDER OF ITAT DELHI

The assessee has filed the captioned appeal assailing the final assessment order dated 26.10.2018 passed under section 144C(13)/143(3) of the Income-tax Act, 1961 (in short ‘the Act’) pertaining to assessment year 2014-15, in pursuance to the directions of learned Dispute Resolution Panel (DRP).

2. In ground no. 1 and its sub-grounds, the assessee has challenged the disallowance of deduction claimed on account of salary paid by the head office to expatriate employees working in India.

2.1 Briefly the facts are, the assessee earlier known as the Bank of Tokyo Mitsubishi UFJ Ltd., is a non-resident banking company incorporated in Japan and is a tax resident of Japan. In the year under consideration, the assessee had paid an amount of Rs.45,42,62,938/- towards salaries to the expatriate employees and taxes paid thereon. The aforesaid amount was claimed as deduction, being expenditure incurred by the head office for the business operations of Indian Branches. In course of assessment proceeding, the Assessing Officer called upon the assessee to justify, how the deduction claimed can be allowed under section 37 of the Act. Though, the assessee justified its claim by submitting that only part of salary paid in Indian rupees for expatriate employees working in India is claimed as deduction, as, such expenditure was incurred for the operation of Indian branches, however, the Assessing Officer was not convinced. He was of the view that the expatriate employees cannot be considered to be working wholly and exclusively for the purpose of branches in India. He observed that looking at the composite nature of employment, there is no demarcation to show that the expenditure was incurred wholly and exclusively for the purpose of business of Permanent Establishment (PE). Accordingly, he disallowed assessee’s claim of deduction. Learned DRP relying upon the direction in assessee’s own case in assessment year 2013-14, endorsed the view expressed by the Assessing Officer.

2.2 We have heard the parties and perused the materials on record. It is a common point, both by the Revenue and the assessee, before us that the issue is squarely covered by various decisions of the Hon’ble Jurisdictional High Court as well as the Tribunal in assessee’s own case in different assessment years.

2.3 Having considered the submissions of the parties, it is observed, identical issue relating to the claim of deduction of salary paid to expatriate employees working in Indian branches came up for consideration before the Tribunal in assessee’s own case in assessment years 2007-08 and 2008-09. While deciding the issue, the Tribunal decided in favour of the assessee by holding that the salary paid by the head office to expatriate employees working in Indian branches is allowable as deduction. While deciding Revenue’s appeal against the decision of the Tribunal, the Hon’ble Jurisdictional High Court in judgment dated 08.04.2016 delivered in ITA No. 604 & 605/2015 upheld the decision of the Tribunal by declining to frame a question on this issue. Thereafter, this issue has been consistently decided in favour of the assessee by the Tribunal in various other assessment years, such, as assessment years 2003-04, 2004-05, 2005-06, 2009-10, 2011-12, 2013-14 and 2015-16. As discussed earlier, the directions of learned DRP in assessment year 2013-14 relied upon by learned DRP in the impugned assessment year was disapproved by the Tribunal while deciding the appeal filed by the assessee vide ITA No. 7212/Del/2017, dated 11.06.2018. In fact in the latest order passed by the Tribunal in assessment year 2015-16 vide order dated 16.10.2020 in ITA No.7895/Del/2019, identical view has been expressed by the Tribunal. Thus, respectfully following the consistent view of the Hon’ble Jurisdictional High Court and the Tribunal in assessee’s own case, we direct the Assessing Officer to allow the deduction claimed by the assessee.

3. In ground no. 2 and its sub-grounds, the assessee has challenged the addition of Rs.29,74,148/-, being interest accrued/received by the Indian PE on the funds lying with the head office/other overseas branches.

3.1 Briefly the facts are, in course of assessment proceeding, the Assessing Officer noticed that the assessee has received interest of Rs.29,74,148/- from its head office and overseas branches. Though, in the computation of total income, the assessee had included it as income, however, in course of assessment proceeding, the assessee claimed that the amounts should be excluded from its income as it is the payment made to self, hence, not taxable. The Assessing Officer, however, did not accept assessee’s claim and brought the interest income to tax. Learned DRP upheld the addition.

3.2 Before us, learned counsel appearing for the assessee as well as learned Departmental Representative fairly agreed that the issue is squarely covered in favour of the assessee by various decisions of the Tribunal in assessee’s own case. Having considered rival submissions, we find that though, the Assessing Officer was conscious of the fact that the issue has been decided in favour of the assessee in preceding assessment years, however, he declined to follow the decision of the Tribunal solely on the ground that the department has appealed against the decision of the Tribunal. The reasoning of learned DRP is also in similar line. However, it is a fact on record that the issue for the first time cropped up in assessment year 2011-12. While deciding assessee’s appeal on the issue, the Tribunal in ITA No. 306/Del/2016, dated 26.04.2017 held that the interest received from head offices/overseas branches cannot be treated as income of the assessee, as, no person can make profit out of itself. Identical view was expressed by the Tribunal in assessee’s own case in various other assessment years, viz., assessment years 2003-04, 2004-05, 2009-10, 2013-14 and 2015-16. Thus, respectfully following the consistent view expressed by the Tribunal, as noted above, we hold that the interest income received by the assessee from head offices/overseas branches is not taxable. Accordingly, we direct the Assessing Officer to delete the addition.

4. At the time of hearing, learned counsel appearing for the asssessee did not press ground nos. 3.1 and 3.2. Accordingly, these two grounds are dismissed as not pressed.

5. In grounds no. 3.3, the assessee has raised the issue of incorrect determination of deduction under section 44C of the Act on account of interest received by the assessee on External Commercial Borrowings (ECBs).

5.1 Briefly the facts are, in the year under consideration, the assessee received an amount of Rs.647,17,71,103/- in respect of interest income of its head office and other overseas branches of ECBs from India. Though, in the original return of income, the assessee did not include the amount so received as income, however, in the revised return of income, the assessee offered it to tax. The assessee again reversed its stand in course of assessment proceeding by claiming that the amount should be excluded from its income, since, it is not taxable in India. Without prejudice, the assessee submitted that, in case the interest received is added as income, then deduction under section 44C of the Act should be allowed. The Assessing Officer negated both the contentions of the assessee. As far as without prejudice submission relating to claim of deduction under section 44C of the Act is concerned, the Assessing Officer held that since, the ECB interest is taxed under the provisions of Article 11(2) of India – Japan Double Taxation Avoidance Agreement (DTAA) on gross basis, no deduction can be allowed. Learned DRP also upheld the aforesaid decision of the Assessing Officer.

5.2 Before us, learned counsel appearing for the assessee fairly conceded that the issue has been decided against the assessee in its own case by the Tribunal in assessment year 2015-16.

5.3 Having considered the submissions of the parties, we find, while deciding identical issue arising in the assessee’s own case in assessment year 2015-16, the Tribunal in ITA No. 7895/Del/2019, dated 16.10.2020, has accepted the decision of the revenue authorities that no deduction under section 44C of the Act in relation to interest earned on ECB is allowable. In view of the aforesaid, we dismiss the ground raised by the assessee.

6. In ground nos. 4 and 4.1, the assessee has raised the issue of non-exclusion of addition on Pass Through Certificates (PTCs’) interest amounting to Rs.82,13,138/- inadvertently offered to tax. 6.1 Before us, learned counsel appearing for the assessee submitted that the issue was not raised either before the Assessing Officer or in the objections raised before learned DRP. However, he submitted in course of assessment proceeding before learned DRP, the assessee has filed additional submissions raising the aforesaid issue, which was not decided by learned DRP. Thus, he submitted, the issue may be restored back to the Assessing Officer for verifying assessee’s claim.

6.2 Learned Departmental Representative agreed with the submissions of the assessee.

6.3 Having considered rival submissions, we deem it appropriate to restore this issue to the Assessing Officer for verifying assessee’s claim and decide it in accordance with law. Of course, the Assessing Officer must afford reasonable opportunity of being heard to the assessee before deciding the issue.

7. In ground nos. 5 and its sub-grounds, the assessee has challenged the disallowance made under section 14A in respect of exempt interest income earned on Pass Through Certificates (PTC) amounting to Rs.5,71,81,664/-.

7.1 Briefly the facts are, in course of assessment proceeding, the Assessing Officer noticed that, though, the assessee had earned exempt interest income on PTC, however, it has not disallowed proportionate expenditure under section 14A of the Act. Therefore, he called upon the assessee to explain, why disallowance under section 14A of the Act should not be made. In response, it was submitted by the assessee that the investment in PTCs’ was made out of own interest free fund. Hence, no disallowance under section 14A can be made. The Assessing Officer, however, was not convinced with the submissions of the assessee and made disallowance under section 14A of the Act. Learned DRP upheld the disallowance made by the Assessing Officer.

7.2 Before us, learned counsel appearing for the assessee submitted, while deciding identical issue in assessee’s own case in assessment year 2015-16 (supra), the Tribunal has deleted the disallowance made under section 14A of the Act. Thus, he submitted, the disallowance made should be deleted.

7.3 Learned Departmental Representative, though, agreed that the issue has been decided in favour of the assessee in assessment year 2015-16, however, she relied upon the observations of learned DRP. Having considered rival submissions, we find, while deciding identical issue in assessee’s own case in assessment year 2015-16 (supra), the Tribunal has held as under:

19. We have carefully considered the rival contention and perused the orders of the lower authorities. In the present case the assessee has earned and tax free income of interest of 37,002,619/– which is claimed is an exempt income u/s 10 [35A] of the Act . The assessee has not disallowed any sum u/s 14 A of the act. The learned assessing officer has computed the disallowance of 22,521,366/–. The learned AO did not disallow any interest expenditure income which is directly relating to the investment in the pass through certificates. However he imputed the proposed disallowance of indirect interest expenditure of Rs 197,40,048/–. He further disallowed 0.5% of the average value of investment as administrative expenditure. Thus the total disallowance was computed at 22,521,366/–. The assessee has raised the first issue that it is treated the pass through certificates as its stock in trade in case of a bank, provisions of Section 14 a cannot be applied and no disallowance of expenditure can be made. The honourable Supreme Court in Maxopp investments Ltd versus Commissioner of income tax for 02 ITR 640 in paragraph number 40 has held that when a bank is holding securities as stock in trade it becomes a business activity of the assessee to deal in those shares as a business proposition. Whether dividend is on door not becomes immaterial. In fact, it would be at work of fate that when the investee company declared dividend, though shares are held by the assessee, though the assessee has to ultimately trade those shares by selling them to on profits. In the present case the assessee is holding this pass through is certificates which are exempt under the provisions of Section 10 (35A) of the act. The distribution of income by the trust which is claimed as exempt by the assessee is also a quirk of the fact. The assessee has constantly arguing that it is holding those pass through certificates as its stock in trade and profit on and from them are offered as a business income. In view of this we do not find any difference if the income is received as a dividend u/s 10 (34) or is distributed by a securitization trust which is also exempt u/s 10 (35A) of the act. In view of this, we are of the view that if these pass through certificates are held as stock in trade by the assessee and distribution of income is also exempt in the hands of the assessee, it is also on the same footing as in case of other banks which are receiving the dividend from securities held as stock in trade. Therefore, we hold that in this case, provisions of Section 14 A does not apply. Hence no disallowance is called for under that Section. Accordingly, made by the learned assessing officer u/s 14A of the income tax act of 22,521,366/– is unwarranted. Further, as the assessee is granted relief on the first argument that Section 14 A is not applicable in case of bank when the investments are held as stock in trade, other arguments raised are merely academic. Accordingly ground number [3] of the appeal of the assessee is allowed.”

7.4 Facts being identical, respectfully following the decision of the Coordinate Bench, as aforesaid, we delete the addition made by the Assessing Officer. This ground is allowed.

8. In ground no. 6, the assessee has challenged the taxability of interest earned under section 244A of the Act on income tax refund. It is the claim of the assessee that the Departmental Authorities have committed an error in taxing the interest earned on income tax refund under section 244A of the Act by applying the rate of 40% as against the beneficial tax rate of 10% as provided under Article 11 of the Treaty.

8.1 Before us, learned counsel appearing for the assessee submitted that the issue has been decided in favour of the assessee by the Tribunal in assessee’s own case in assessment year 20115-16. Though, learned departmental representative agreed with the aforesaid factual position, however, he relied upon the observations of learned DRP.

8.2 Having considered rival submissions, we find, while deciding identical issue in assessee’s own case in assessment year 2015­16 (supra), the Tribunal has held as under:

“28. We have carefully considered the rival contentions and perused the order of the learned assessing officer. We find that the issue squarely covered in favour of the assessee by the decision of the Honourable Bombay High Court in 377 ITR 102 wherein the issue has been set aside to the file of the learned assessing officer to determine/adopt the rate of tax on refund in the light of relevant clauses of the DTAA and the decision of the special bench in clough engineering [supra]. Therefore, we also set aside this issue to the file of the learned assessing officer to decide on the rate of tax on interest on income tax refund received by the assessee. Accordingly ground number [5] of the appeal of the assessee is allowed.”

8.3 Respectfully following the decision of the Coordinate Bench (supra), we direct the Assessing Officer to apply the tax rate as per the Treaty on the interest of income tax refund received by the assessee. Accordingly, ground is allowed.

9. Ground no. 7 is not pressed, hence, dismissed.

10. In ground no. 8, the assessee has challenged the addition of Rs.16,92,15,587/-, being the transfer pricing adjustment in respect of receipt of counter guarantee commission.

10.1 Briefly the facts are, for the purpose of participating in tender/performance guarantee etc. in India, at times, the customers of other overseas branches approach the assessee for arranging a guarantee in India. According to the needs of the customers, the assessee arranges for issuance of guarantee for the purpose of customers of the overseas branches against counter guarantee provided by overseas branches. On receipt of counter guarantee from overseas branches, assessee issues a guarantee letter in favour of the beneficiaries/customers of the overseas branches. In course of transfer pricing proceeding, the Transfer Pricing Officer (TPO) held that the assessee has provided services in the shape of bank guarantee to the clients of its AE, which fall in the ambit of international transaction. Accordingly, he proceeded to compute the arm’s length price (ALP) of such transaction by adopting CUP method and applying commission rate of 1.30% plus 200 BPS. Relying upon the direction given in assessee’s own case in assessment year 2013-14, learned DRP modified the order of the TPO by holding that there is no justification for mark-up of 200 BPS in addition to the commission at the rate of 1.30%. They directed accordingly.

10.2 Before us, learned counsel appearing for the assessee submitted, the issue is squarely covered in favour of the assessee by the decisions of the Tribunal in assessee’s own case in assessment years 2009-10 and 2015-16.

10.3 Learned Departmental Representative, on the other hand, submitted, the assessee being a banking company is a risk bearing entity, hence, has to charge commission on the guarantee provided. She submitted, the assessee has not benchmarked the transaction separately. Without prejudice, she submitted, the issue may be restored back to the Assessing Officer for deciding afresh.

10.4 We have considered rival submissions and perused the materials on record. It is observed, while considering identical issue arising in assessee’s own case in assessment year 2015-16 (supra), the Tribunal following its decision in assessee’s own case in assessment year 2009-10 has held as under:

“39. We have carefully considered the rival contention and perused the orders of the lower authority and the direction of the learned dispute resolution panel. As in the case of the assessee In ITA No. 1162/Del/2014 for Assessment Year: 2009-10 dated 21/5/2020 has considered the identical issue as Under:-

“53. We have heard the rival contentions and perused the record. The issue raised vide ground of appeal no.12 is against the transfer pricing adjustment made on account of Receipt of guarantee commission. The assessee while benchmarking its international transactions in the transfer pricing report applied combined approach and has benchmarked under TNMM method. The case of the assessee is that the Transfer pricing analysis undertaken by applying TNMM method on combined approach should be accepted, as the margins of the assessee has been accepted and no adjustment has been made in the hands of the assessee. The only adjustment which was made in the hands of the assessee was on account of Receipt of guarantee commission. The case of the assessee before us is that as PE in India, it has limited role and was not bearing any risks. The assessee received part of guarantee commission in its capacity as facilitator only. When the persons needed guarantee in India to participate in a tender, then service of the Bank was utilized for issuing guarantee in favour of the beneficiary. The evaluation of the beneficiary for the creditworthiness of the customers was performed by the overseas branches, whereas the assessee had limited role in issuing letter of guarantee, it received 1% guarantee commission. In these facts, there is no merit in comparing the rate received by the assessee with the rate charged by different banks who are operational in India and providing financial guarantee to its customers, with all risk involved therein. In such facts and circumstances, the Assessing Officer/TPO erred in applying the rate charged by Axis Bank, Canara Bank, Punjab National Bank and State Bank of India, etc. with arithmetic mean of 2.71% to benchmark the international transactions between the assessee and its overseas branches of receipt of bank guarantee commission. The details of the international transaction are tabulated in the order of the TPO itself and the same clearly reflect that no transaction is undertaken except with overseas branches. The assessee undoubtedly is also providing the services to its customers in India where it a risk bearing entity. We are of the view that where the assessee has undertaken bundle of international transactions with its AE and the same has been benchmarked by applying combined approach and the method of TNMM has been used and the margins shown by the assessee have been accepted; then there is no merit in segregating the international transaction of the receipt of the guarantee commission and benchmarking the same separately. The margins of the combined approach has been accepted at Arms Length. Consequently, there is no merit in the transfer pricing adjustment made in the hands of the assessee. The same is thus directed to be deleted. The ground of appeal No.12 is thus deleted.”

40. As the facts and circumstances of the case are identical to the facts decided in case of the assessee for assessment year 2009 – 10, respectfully following the decision of the coordinate bench, we allow this ground of appeal of the assessee holding that as the banking business of the assessee and the transactions related to the issue of guarantee commission on by the assessee are interlinked and closely connected, they should have been benchmarked in a bundled manner. Accordingly ground number 9 of the appeal of the assessee is allowed.”

10.5 In the facts of the present appeal also, the TPO has accepted all other international transactions of the assessee to be at arm’s length, except the transaction relating to provision of counter guarantee which has been treated as a separate transaction. As held by the Coordinate Bench in assessment years 2015-16 and 2009-10, since all the international transactions are interlinked and closely connected, they should have been benchmarked in a bundled manner. Thus, respectfully following the orders of the Tribunal in assessment years 2009-10 and 2015-16, we delete the adjustment made by the TPO. This ground is allowed.

11. Besides the main grounds, the assessee has raised following additional grounds:

“1. Applicable Rate of Tax

(a) That on the facts and circumstances of the case and in law, the Hon’ble DRP and the ld. AO erred in imposing the tax rate of 43.26% on the business profits attributable to the PE of the Appellant in India.

(b) Under the provisions of Article 24 of the DTAA, the applicable rate of tax on the business profits attributable to the PE of the Appellant in India cannot exceed the applicable rate of tax (as per the Finance Act for the subject AY) in case of Domestic Companies i.e. 33.99%.

11.1 At the time of hearing, learned counsel appearing for the assessee fairly conceded that the issue has been decided by the Tribunal against the assessee in other assessment years.

11.2 Learned Departmental Representative agreed with the aforesaid submission of the assessee.

11.3 Having considered rival submissions and perused the materials, we find, while deciding identical issue in assessee’s own case in assessment year 2009-10, in ITA No. 1162/Del/2014, dated 21.05.2020 the Tribunal held as under:

“43. We have heard the rival contentions and perused the record. We find that that the issue which is raised in the present appeal is against the rate of tax to be charged i.e. rate of tax on foreign company @ 40% or rate of tax on the domestic company @ 30%. The assessee is aggrieved by the orders of the authorities below in charging higher rate of tax. The plea of the assessee is that it cannot be discriminated by way of higher rate of taxation in view of the provisions of DTAA. We find that the said issue has arisen in the case of the assessee in Assessment Year 1991-92 wherein the Hon’ble high Court had held that lower rate of tax was applicable to the profits of the business. We further find that the Tribunal has also decided the said issue in assessee’s own case in Assessment Years 2000-01 and 2001-02 in ITA Nos. 210 & 211/Mum/2005, order dated 13.09.2019 vide paras 13 to 16 which read as under:-

“13. The assessee was aggrieved to the application of 45% of tax rate which is much higher than the rate applicable to a domestic company and pleaded that in view of the benefits of non-discrimination provided in the DTAA, the company be assessed at domestic rate. The ld. AR argued that the assessee cannot be disadvantaged and discriminated by way of higher rate of taxation in view of the provisions of the DTAA. It was argued that The provisions of Article 24 of the DTAA between India and Japan reads as under:

“Article 24

2. The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other Contracting State than the taxation levied on enterprises of that other Contracting State carrying on the same activities.”

14. The ld. DR has argued placing reliance on Explanation 1 to Section 90 of the Act which reads as under:

“Explanation 1 – For the removal of doubts, it is hereby declared that the charge of tax in respect of a foreign company at a rate higher than the rate at which a domestic company is chargeable, shall not be regarded as less favourable charge or levy of tax in respect of such foreign company .”

15. We find that this Explanation has been brought into statute w.e.f. 01.04.2013. Prior to this Explanation read as substituted by the Finance (No. 2) Act, 2009 with effect from 1st October, 2009. Prior to substitution, section 90 as amended by the Finance Act, 2001, with retrospective effect from 1st April, 1962; Finance Act, 2003, with effect from 1st April, 2004; Finance (No. 2) Act, 2004, with retrospective effect from 1st April, 1962, stood as under:

“90. Agreement with foreign countries.

(1) The Central Government may enter into an agreement with the Government of any country outside India –

(a) for the granting of relief in respect of-

(i) income on which have been paid both income-tax under this Act and income-tax in that country; or

(ii) income-tax chargeable under this Act and under the corresponding law in force in that country to promote mutual economic relations, trade and investment, or

(b) for the avoidance of double taxation of income under this Act and under the corresponding law in force in that country, or

(c) for exchange of information for the prevention of evasion or avoidance of income-tax chargeable under this Act or under the corresponding law in force in that country, or investigation of cases of such evasion or avoidance, or

(d) for recovery of income-tax under this Act and under the corresponding law in force in that country, and may, by notification in the Official Gazette, make such provisions as may be necessary for implementing the agreement.

(2) Where the Central Government has entered into an agreement with the Government of any country outside India under sub-section (1) for granting relief of tax, or as the case may be, avoidance of double taxation, then, in relation to the assessee to whom such agreement applies, the provisions of this Act shall apply to the extent they are more beneficial to that assessee.

(3) Any term used but not defined in this Act or in the agreement referred to in subsection (1) shall, unless the context otherwise requires, and is not inconsistent with the provisions of this Act or the agreement, have the same meaning as assigned to it in the notification issued by the Central Government in the Official Gazette in this behalf. Explanation : For the removal of doubts, it is hereby declared that the charge of tax in respect of a foreign company at a rate higher than the rate at which a domestic company is chargeable, shall not be regarded as less favourable charge or levy of tax in respect of such foreign company.

16. The matter has been decided in favour of the assessee in their own case by the order of the Hon’ble Calcutta High Court in ITA No. 39 of 1998 dated 07.08.2019 for the assessment year 1991-92 by referring to the provisions of Article 24 of the DTAA. We also find that the Explanation 1 to Section 90 has not been considered by the Hon’ble High Court of Calcutta while dealing with the case of the assessee for the assessment year 1991-92. However, for assessment year 1998-99, this issue has been dealt with by the Co-ordinate Bench of ITAT Delhi and decided against the assessee vide order dated 03.06.2019 in ITA No. 1783/Kol/2002 by taking into consideration the provisions of Explanation 1 to Section 90(2) of the Act. The ld. AR has submitted that the issue for that year is still pending with the Hon’ble High Court of Delhi. Hence, keeping in view, the entirety of the facts, we hereby hold that the assessee cannot be regarded as treated less favourably by taxing at a higher rate. As a result the appeal of the assessee on this ground is dismissed.

44. The issue has already been decided by the Tribunal in assessee’s own case and the same is pending before higher forum and consequently we do not express any view. Applying the said ratio, Ground No.11 raised by the assessee is thus dismissed.

11.4 Similar views have been expressed by the Tribunal in assessment years 2011-12, 2013-14 and 2015-16 as well. Thus, respectfully following the consistent view of the Tribunal on the issue in assessee’s own case, we dismiss the additional grounds raised by the assessee.

12. In the result, the appeal is partly allowed.

Order pronounced in the open court on 12th October, 2022

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