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TMI Blog2003 (3) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... ion No. 1: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in allowing the assessee's claim of deduction of Rs. 19,17,820 on account of amount paid by the State Bank of India to its subsidiaries towards opening of new branches?" Arguments Mr. R.V. Desai, learned senior counsel appearing on behalf of the Department, contended that the State Bank of India had provided subsidy to its subsidiaries, viz., the State Bank of Saurashtra, the State Bank of Patiala, etc., under section 48 of the State Bank of India (Subsidiary Banks) Act, 1959. He contended that under section 48 of the said Act, 1959, subsidy is provided by the State Bank of India to meet the cost of any specific programme of development underta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced on behalf of the Department. The Statement of Objects and Reasons for enacting the said Act of 1959 indicates reconstitution of the State Bank of Patiala, the State Bank of Saurashtra, the State Bank of Travancore, etc., which were earlier State Associated Banks owned in part by the State Governments. These banks were reconstituted as subsidiaries of the State Bank of India. The State Bank of India was constituted under the State Bank of India Act of 1955. Under section 32 of the said Act of 1955, the State Bank of India was required to act statutorily as agent of the Reserve Bank of India. Section 32 falls under Chapter VI of the said Act of 1955. Chapter VI deals with business of the State Bank of India. Under section 32(4) of the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue expenditure in relation to the payer. Accordingly, we answer the above quoted question in the affirmative, i.e., in favour of the assessee-bank and against the Department. Question No. 2: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee's claim for deduction under section 35B of the Act in respect of its foreign branches is allowable Arguments: Mr. R.V. Desai, learned senior counsel appearing on behalf of the Department, contended that in this case, two points arise for determination. He submitted that the State Bank of India was not eligible to claim weighted deduction under section 35B as the State Bank of India was not an exporter of goods or services. Secondly, he c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance under section 35B of the Income-tax Act. However, as stated above, it was argued on behalf of the Department that even if the State Bank of India was eligible for allowance under section 35B, still the State Bank of India was required to lead evidence to prove the activity, which it undertook, on which it claims to have expended the amount. That, weighted deduction was admissible on certain types of expenditure incurred on specified activities under section 35B(1)(b)(i) to (ix) and that in this case, the State Bank of India has not proved that the expenditure was incurred by it on any of the abovementioned specified activities. We do not find any merit in this argument. Firstly, we may point out that the matter stood remanded to the In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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