- (1.) Leave granted in SLP (C) No. 23072 of 2002.
(2.) The assessment year in question is 1981-82. The question which has arisen for determination is whether the interest paid by the appellant's branch in Bangkok to its customers on deposits made by the customers would qualify for weighted deduction under Section 35-B (l) (b) (iv) of the Income tax Act, 1961.
(3.) The Tribunal noted that the appellant had been allowed this weighted deduction for the past years albeit under Section 35-B (l) (b) (iv). It was held that on a perusal of the balance-sheet of the Bangkok branch of the appellant, the foreign branch was providing banking services and facilities to its foreign customers with the help of deposits and borrowings from the Bank. It was held that since there was no dispute that the appellant was not permitted by reserve Bank of India to increase its capital in the Bangkok branch so that the appellant was compelled to render banking services out of the deposits and the borrowings made by it, it could be held that the monies paid by the appellant to its customers by way of interest on the deposits and borrowings would qualify for weighted deduction under Section 35-B (l) (b) (iv) of the act,;