COMMISSIONER OF INCOME TAX Vs. INDIAN BANK

JUDGEMENT

(1.) AT the instance of the Revenue, the following question has been referred to this court, viz.,

(2.) THE assessee-bank which has its registered office within the jurisdiction of this court, and has branches outside India including Ceylon and Singa- pore. It claimed the benefit of section 35B of the Income-tax Act, 1961, by way of weighted deduction for the expenditure incurred by it on its branches at Ceylon and Singapore for the assessment years 1976-77 and 1979-80. THE Income-tax Officer had taken the view that the assessee was not entitled to weighted deduction on the expenditure incurred by the assessee. as he had considered that the difference of amount represented the gross interest paid by the assessee to its customers, who had made deposits with the bank, and such gross interest could not be treated as expenditure, as in his view, it is only the amount of expenditure determined after setting off the interest received by the bank from its customers against the interest paid by it, that was relevant for the purposes of section 35B(1)(b) of the Act. THE said view of the Income-tax Officer was confirmed by the Commissioner also. But, however, the Tribunal disagreed arid held that the assessee was entitled to benefit under section 35B of the Act.