1999 (7) TMI 31

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....come-tax Officer held that the assessee was not entitled to weighted deduction on the expenditure of Rs. 1,04,43,248 spent by it, but only on Rs. 24,78,458 as in his view the difference represented the gross interest paid by the assessee to its customers, who had made deposits with the bank, and such gross interest could not be treated as expenditure, as in his view, only the amount of expenditure determined after setting off the interest received by the bank from its customers against the interest paid by it, was relevant for the purposes of section 35B(1)(b) of the Act. That view of the Income-tax Officer was affirmed by the Commissioner. The Tribunal, however, disagreed, and held that the assessee was entitled to the benefit of section 3....

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....nies had been expended, all such monies would qualify for the weighted deduction, provided the expenditure was incurred for any one of the purposes referred to in section 35B of the Act. In the absence of anything in the section which would require the expenditure to be ascertained only after first deducting or setting off the income from the use of those funds it is not possible to accept the argument advanced for the Revenue that the interest receipts should be set off against interest payments, when admittedly, interest had been paid on the deposits received by the bank, and such payment amounted to expenditure for the purposes of the section. It is significant that the section refers to "any expenditure". The use of the word "any" prece....

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....ibunal and in our opinion, rightly so. The assessee with the intention of bringing about improvements in the way it did its business had sought and obtained reports of the consultants, so that efficiency of the business could be increased by employing better methods and re-organising the business itself to the extent required. The fact that it sought such advice did not imply that it would accept all the advice that was tendered and would implement it in the manner recommended. Merely obtaining a report from a management consultant and paying fees therefor, cannot be regarded as capital expenditure, as such report was not obtained as part of documentation packages, but in a contract covering comprehensive restructuring of the business in....