I.P. Mukerji, J.

1. THIS is an Appeal under section 260A of the Income Tax Act, 1961 (in short "the Act") against the Order of the Income Tax Appellate Tribunal (in short "the tribunal") dated 22nd August 2005.

2. BEFORE discussing the merits of this Appeal, a reference to section 90 of the Act is necessary. It empowers the Central Government to enter into an agreement with a foreign government to interalia avoid double taxation in India as well as in that foreign country. In such case where an agreement has been entered into, the said Act will only apply to the assessee, if the Act is more beneficial than the agreement.

The appellant before us is a foreign company incorporated in Netherlands, and having its principal branch office in India at ITC Center, 4th floor, Russel Street, Kolkata 71.

3. WE are here concerned with only a limited transaction made by this bank and the effects thereof, for the purpose of computing its income. In course of its banking activities the appellant's said branch in India remits substantial funds to its head office as payment of interest. While the appeal was being argued, it was submitted by Mr. R.N. Bajoria, learned senior Advocate for the a