High Court Of Madras
CIT vs. Bharat Overeas Bank Ltd.
Sections 35B, FA 1983
Asst. Year 1984-85
R. Jayasimha Babu & K. Raviraja Pandian, JJ.
TC No. 190 of 1994
27th August, 2002
T.C.A. Ramanujam, for the Revenue : R. Meenakshisundaram, for the Assessee
R. JAYASIMHA BABU, J. :
The question referred to us for consideration at the instance of the Revenue is, “whether, on the facts and in the circumstances of the case, the Tribunal was right in law in directing the AO to recompute the DIT relief admissible to the assessee on the income derived from the Foreign Branch at Bangkok without reducing the deduction allowable under s. 35B of the IT Act, 1961 ?”. The assessment. year. is 1984-85. The assessee is a bank which has a branch at Bangkok, the income from which is eligible for double taxation relief. Its claim that while working out that relief, the deduction allowed to the assessee under s. 35B ought not to have been taken into account was rejected by the AO. The CIT, however, allowed the claim by following an order which had been made for the asst. yrs. 1977-78, and 1978-79. The Tribunal having agreed with the CIT this reference is made at the instance of the Revenue. The Tribunal as also the CIT have completely missed the effect of the change in the law brought about by the Finance Act, 1983, which provided that no deduction under s. 35B shall be allowed in relation to expenditure incurred on or after 1st March, 1983. That amendment came into force w.e.f. 1st April, 1983. As the assessment year with which we are concerned is 1984-85, the assessee is not entitled to claim any relief under s. 35B in relation to the expenditure incurred on or after 1st March, 1983. The question referred to us is, therefore, answered in favour of the Revenue and against the assessee.
[Citation : 258 ITR 573]