PUNJAB NATIONAL BANK Vs. INSPECTING ASSISTANT COMMISSIONER.

JUDGEMENT

(1.) THE assessed is a Nationalised Bank and in this appeal it objects to the disallowance of certain bad debts and to the refusal of allowance under Sec. 35B in respect of expenses incurred at the branch of the Bank in London.

(2.) WE shall first take up the issue concerning the disallowance of the claim made under Sec. 35B. The assessed Bank has a branch in London and on the maintenance of that branch, it incurred an expenditure of Rs. 64,16,686 and claimed that on the whole of that expenditure it was entitled to weighted deduction under the provisions of Sec. 35B of the Income Tax Act. On the refusal of the Inspecting Asstt. Commissioner to allow the assessed's claim, the matter came up before the Commissioner (A), who also upheld the disallowance. The Commissioner (A) observed that under clause (iv) of Sec. 35B (1) (b) weighted deduction was permissible only on maintenance outside India of a branch, office or agency for the promotion of the sale outside India of such goods, services or facilities and this clause permitted the expenditure only where the assessed Bank maintained an office outside India and exports certain goods or services or facilities and that the assessed Bank could not be said to be exporting any services or facilities outside India and that a mere setting up of a branch in London though it helped exporters or importers, did not amount to export of any services or facilities outside India.

(3.) THE learned counsel for the assessed Shri M. L. Khanna, now points out that the view taken by the authorities below was totally unsustainable. it was pointed out to us by filing a copy of the note submitted to the Commissioner (A) at the time of the hearing of the appeal, that the branch in London performs various services among which the following were important : -