Section 60 — Deduction of head office expenditure in case of non-residents

(1) Irrespective of anything to the contrary contained in sections 26 to 54, in
the case of a non-resident assessee, deduction of head office expenditure
incurred by such assessee as is attributable to his business or profession in India,
shall be allowed in computing the income chargeable under the head “Profits and
gains of business or profession” subject to provisions of sub-section (2).
(2) The deduction allowable under sub-section (1) shall be restricted—
( a) if the adjusted total income of the assessee is a loss, to an upper monetary
limit of 5% of the average adjusted total income of the assessee; or
( b) in any other case, to an upper monetary limit of 5% of the adjusted total
income of the assessee.
(3) For the purposes of this section,—
( a) “adjusted total income” means the total income computed under this
Act, without giving effect to the allowance referred to in this section
or in section 33(11) or the deduction referred to in section 32( i)(A) or
any loss carried forward under section 111(1) or 112(1) or 113(2) or
115(2) or the deductions under Chapter VIII;
( b) “average adjusted total income” means,—
( i) if the assessee is assessable for each of the three tax years imme -
diately preceding the relevant tax year, the arithmetic mean of his
adjusted total income over those three tax years;
( ii) if the assessee is assessable only for two of the said three tax years,
the arithmetic mean of his adjusted total income over those two
tax years;
( iii) if the assessee is assessable only for one of the said three tax years,
his adjusted total income for that tax year;
( c) “head office expenditure” means executive and general administration
expenditure incurred by the assessee outside India, including expendi-
ture incurred in respect of—
( i) rent, rates, taxes, repairs or insurance of any premises outside India
used for the business or profession;
( ii) salary, wages, annuity, pension, fees, bonus, commission, gratuity,
perquisites or profits in lieu of, or in addition to, salary, whether
paid or allowed to any employee or other person employed in, or
managing the affairs of, any office outside India;
( iii) travelling by any employee or other person employed in, or man -
aging the affairs of, any office outside India; and
( iv) such other matters connected with executive and general admin -
istration, as may be prescribed.