THE C.I.T.,MUMBAI CITY III,MUMBAI. vs. M/S.BANK OF INDIA

-1- IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1122 OF 2000 The Commissioner of Income Tax, Mumbai City III, Mumbai ..Appellant Versus Bank of India, Express Towers, Nariman Point , Mumbai-400 021. ..Respondent Mr. Ashok Kotangale i/b. R.N. Bandhopadhyay for the Appellant. Mr. S.S. Shetty for Respondents. CORAM : F.I. REBELLO CORAM : F.I. REBELLO CORAM : F.I. REBELLO & R.V. MORE,JJ. R.V. MORE,JJ. R.V. MORE,JJ. DATED : 2nd July, 2007 DATED : 2nd July, 2007 DATED : 2nd July, 2007 JUDGMENT (PER F.I. REBELLO, J.) JUDGMENT (PER F.I. REBELLO, J.) JUDGMENT (PER F.I. REBELLO, J.) . The Appeal by the Revenue is in respect of the assessment year 1981-82. The question of law as formulated in para.5 really pertains to weighted deduction. 2. With the above a few facts may now be set out. The Assessment Officer rejected the assessee’s claim of deduction under Section 35B. The CIT (A) accepted in principle that assessee was entitled to deduction under Section 35B. The Assessment Officer thereafter made certain orders for giving effect to the order of CIT (A). Two Appeals were preferred by the assessee in connection with the orders passed by the Assessment Officer to give effect to the earlier order of C.I.T. (A). . In the Appeal before the I.T.A.T. the relevant facts have been narrated in paragraph 7. After considering the CNR No : HCBM020007332000 Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:16:05

-2- various contentions of the parties before it the learned I.T.A.T. in paragraph 11 in so far as expenditure on Items such as Municipal taxes, salary, provident fund, rent, tax insurance, light and power expenses estimated it at 25% of the total expenses and arrived at a conclusion that it was at a lower side and that a higher proportion of expenditure should have been allowed for weighted deduction for the items aforestated other than salary and, therefore, held that these items would be eligible for weighted deduction to the extent of 50% of the expenses. The Tribunal concurred with the finding of the CIT (A) that the salaries, allowances, provident fund contribution to the employees in overseas branches should be held eligible to the extent of 25% only. The Tribunal disagreed with the finding of the CIT (A) that the entire law charges should not be treated as invested with the character of export market development expenses and directed that these expenses to the extent of 25% may be held as eligible for weighted deductions. It accepted the finding by CIT (A) in the matter of travelling expenses in foreign branches of 50%. It however, felt that in the matter of advertisement in foreign branches it should qualify for 100% weighted deduction instead of 75% so treated by the C.I.T. (A). The various other weighted deductions are also stated therein. It is not necessary for us to reproduce the same. In the light of that the A.O. was directed to recompute the weighted deductions to the assessee under Section 35B of the Act in accordance with Act for both assessment years 1980-81 and 1981-82. Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:16:05

-3- . The Tribunal also noted that the assessee’s appeal for the assessment year 1981-82 there are some grounds of appeal of which Ground No.2 seeks that the entire income of the assessee’s Singapore Branch should be excluded from the total income of the assessee accessable to tax in India. Similarly Ground No.3 that the entire income of the assessee’s branches in Japan should also be excluded from the total income of the assessee assessable to tax in India. It was pointed out that these grounds of Appeal were covered in favour of the Assessee as per paragraphs 18 and 19 of the order of the I.T.A.T., B-Bench, Bombay dated 4th June, 1990 in the case of the assessee for the assessment year 1977-78 to 1979-80, 1980-81, 1982-83 and 1983-84 (Japan) and Assessment Years 1979-80, 1980-81, 1982-83 and 1983-84 (Singapore). Following those orders the two grounds were allowed in respect of the assessment year 1981-82 also. 3. In the course of the hearing our attention was invited on behalf of the respondents to the judgment in the Commissioner of Income-Tax (Central) vs. Piramal Spinning Commissioner of Income-Tax (Central) vs. Piramal Spinning Commissioner of Income-Tax (Central) vs. Piramal Spinning and Weaving Mills Ltd. 124 ITR 480 and Weaving Mills Ltd. 124 ITR 480 and Weaving Mills Ltd. 124 ITR 480 to contend that the percentage which should be allowed to the assessee by way of weighted deduction was a question of estimation to be arrived at on the facts and the materials on the record and did not give rise to any question of law for reference to the High Court. . In our opinion question No.1 of law as framed pertains to the matter of weighted deduction. In so far as Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:16:05

-4- the other questions are concerned as noted by the Tribunal the assessee was given benefit for establishments both in Japan and Singapore. That has not been challenged. That has been accepted by the Revenue.d Thus those questions would not arise. . In the light of that Appeal dismissed. (R.V. MORE, J) R.V. MORE, J) R.V. MORE, J) (F.I. REBELLO F.I. REBELLO F.I. REBELLO, J) Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 06:16:05 Powered by TCPDF (www.tcpdf.org)