Banking gross receipts under tax law mean deposits only, not advances, loans, investments or repayments for disallowance purposes.

For a bank, "turnover" is not the apt measure for section 37(3A) of the Income-tax Act, 1961; the relevant expression is "gross receipts", which in the banking context means deposits received during the relevant year. Advances, loans, investments and repayments of amounts lent do not form part of gross receipts for this purpose. On that basis, the Tribunal was incorrect in aggregating advances and banking investments as turnover or gross receipts for determining the disallowance on advertisement, publicity and sales promotion expenditure, and the matter had to be remitted to ascertain the actual deposits received.

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Issues: Whether, for the purpose of section 37(3A) of the Income-tax Act, 1961, a bank's gross receipts or turnover should be computed by aggregating its advances and banking investments, and whether only ten per cent of the adjusted expenditure on advertisement, publicity and sales promotion was therefore disallowable.

Analysis: The expression "turnover" is not ordinarily apt to banking activity, since banking is not a trading business in the usual sense. For a bank, the more appropriate expression is "gross receipts", and that expression cannot be equated with profit or gross income. In the context of banking, gross receipts refer to the total deposits received during the relevant accounting year. Advances and loans made by the bank, and repayment of amounts lent, do not constitute gross receipts for the purpose of section 37(3A). As the record did not disclose the deposits actually received during the year, the proper figure of gross receipts had to be ascertained from the assessee.

Conclusion: The answer to the referred question is in the negative. The Tribunal was not right in treating advances and investments as the bank's turnover or gross receipts for section 37(3A); the matter was remitted for determination of the deposits received and consequent disallowance.

Ratio Decidendi: For a bank, "gross receipts" under section 37(3A) of the Income-tax Act, 1961 means deposits received during the relevant year, and not advances, loans, investments, or repayments of amounts lent.

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