COMMISSIONER OF INCOME TAX, BOMBAY vs M/S. BANQUE NATIONALE DE-PARIS

The Supreme Court upheld the Bombay High Court's decision affirming the Tribunal's ruling that interest on securities received from the Government could be excluded from chargeable profits under Clause (x) of Rule 1 of the First Schedule to the Super Profits Tax Act, 1963. The Court clarified that the computation of chargeable profits must consider only the proportionate interest on borrowings, not the entire interest amount paid. The judgment reinforces the interpretation of tax provisions concerning non-resident entities and their income from government securities.