Bank deposit exemption extends to a foreign branch where the statute imposes no territorial limit.

A statutory exemption for deposits with a banking company to which the Banking Regulation Act, 1949 applies was held to extend to a deposit maintained in the Colombo branch of an Indian bank. The court reasoned that the relevant test is whether the deposit is with the same banking company covered by the statute, not the physical location of the branch where it is kept. As the Wealth-tax Act, 1957 contained no express territorial restriction, the foreign location of the deposit did not defeat exemption, and the assessee was entitled to relief under section 5(1)(xxvi).

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Issues: Whether a deposit maintained by the assessee in the Colombo branch of an Indian banking company was eligible for exemption under section 5(1)(xxvi) of the Wealth-tax Act, 1957.

Analysis: The exemption provision applies to any deposits with a banking company to which the Banking Regulation Act, 1949 applies. A banking company is one that transacts the business of banking in India, and the Indian Bank satisfied that description. The provision does not impose any territorial restriction requiring the deposit itself to be situated in India. The place where the deposit is kept is therefore immaterial so long as the deposit is with the same banking company to which the statute applies.

Conclusion: The deposit with the Colombo branch of the Indian Bank fell within section 5(1)(xxvi) of the Wealth-tax Act, 1957, and the assessee was entitled to the exemption.

Ratio Decidendi: Where a statutory exemption covers deposits with a banking company to which the Banking Regulation Act applies, the exemption cannot be denied merely because the deposit is maintained at a foreign branch of that banking company, absent any express territorial limitation in the taxing statute.

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