TMI Blog2001 (7) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... , in respect of the expenses incurred outside India, and also on its international division in India. The facts: The facts leading to the present petition may be stated briefly: The petitioner is one of the leading nationalised banks of the country, engaged in the business of banking and carries on banking operations from its branches situated all over India as well as abroad. At the material time it had 32 foreign branches situate outside India, spread over in several countries of the world. The foreign branches at the relevant time carried on various banking activities such as accepting deposits, advancing money and other banking services, etc. The petitioner-bank had filed a return of income for the assessment year 1975-76 on Feb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ground that section 35B(1)(b)(iv) required that the expenditure has to be incurred wholly and exclusively on the maintenance outside India of a branch, office or agency for the promotion of the sale outside India of such goods, services or facilities. In other words, respondent No. 1 was of the view that the foreign branches of the petitioner-bank were not promoting banking services or facilities but were engaged in normal banking business not amounting to promotion of banking services or facilities. Thus, he was of the view that the petitioner-bank was not entitled to get the benefit of section 35B(1)(b)(iv) of the Act. Respondent No. 1 also held that he was unable to agree with the views expressed by the Tribunal in the petitioner' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Madras Bench of the Tribunal in the case of Indian Overseas Bank as well as the order of the apex court whereby the special leave petition was dismissed in the case of India Hotels Ltd. Consequently, the Tribunal had reiterated its views expressed in the orders dated May 21, 1983, January 2, 1985, June 19, 1986, August, 1988, December 15, 1989, copies of which were produced on records. Respondent No. 1 had filed reference application before the Tribunal under section 256(1) of the Act, and had raised a question as to: whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee-bank was eligible for weighted deduction under section 35B ? However, the Tribunal rejected the said app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction at Bombay, wherein it was confirmed by all the officers exercising jurisdiction that the claim under section 35B had not been accepted by them in any of the cases of other banks. Apart from this, learned counsel for the respondent has further tried to canvas on the text of section 35B(1)(b)(iv) of the Act, and contended that the words used in sub-clause (iv) of the said section "for the promotion of" are restricted only to cases where the branch, office or agency outside India is "for promotion of the sale outside India of the goods, services or facilities" dealt in or provided by the assessee in the course of its business. In his submission, the foreign branches of the assessee-bank were being engaged in normal banking business. It c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , office or agency for the promotion of the sale outside India of such goods, services or facilities.. The issue: In the light of the above rival contentions, the following question arises for our consideration: "1. Whether, in the facts and circumstances, the Assessing Officer was right in holding that the bank was (not) entitled to weighted deduction under section 35B of the Act and that for the assessment year 1975-76 Findings: Having considered the rival submissions, section 35B(1)(b)(iv) requires that the expenditure referred to in clause (a) is that incurred wholly and exclusively on maintenance outside India of a branch, office or agency for promotion of the sale outside India of such goods, services or facilities. Turnin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is inevitable in a hierarchical system of courts that there are decisions of the supreme Appellate Tribunal which do not attract the unanimous approval of all members of the judiciary. But the judicial system only works if someone is allowed to have the last word, and that last word once spoken is loyally accepted." The better wisdom of the court below must yield to the higher wisdom of the court above as held by the Supreme Court in the matter of Asst. CCE v. Dunlop India Ltd. [1985] 154 ITR 172. In the aforesaid backdrop, for the reasons stated hereinabove, the impugned order of the Assessing Officer dated February 21, 1986, is quashed and set aside. In the result, the writ petition is allowed. Rule is made absolute with no order as ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
