1998 (3) TMI 59

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....the Act. The assessment year with which we are concerned in this reference is 1979-80. The assessee is a banking company, governed by the provisions of the Banking Regulation Act, 1949. It carries on the business of "banking" as that expression is defined in section 5(b) of the Act. The definition of "banking" in section 5(b) of the Act reads as under : " 'Banking' means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, order or otherwise." The assessee-bank also carries on other business which a banking company may engage in under section 6 of that Act, and which includes the borrowing or raising or taking up of money,....

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....cent. of the turnover or, as the case may be, gross receipts of the business or profession (iii) where such aggregate expenditure 15 per cent. of the adjusted exceeds 1/2 per cent. of the turn- expenditure. over or, as the case may be, gross receipts of the business or profession Explanation.---For the purposes of this sub-section,--- (a) 'adjusted expenditure' means the aggregate expenditure incurred by the assessee on advertisement, publicity and sales promotion in India as reduced by so much of such expenditure as is not allowed under sub-section (1) and as further reduced by so much of such expenditure as is not allowed under sub-section (2B) or sub-section (3); (b) 'turnover' and 'gross receipts' mean turnover or gross r....

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....ank's turnover or gross receipts is to be determined for the purpose of section 37(3A) of the Act. The term 'turnover' is not normally associated with the business of banking, but is normally associated with manufacturing, trading and similar activities. It refers to the total value of all sales effected by a manufacturer, or trader, or the amount of money turnover in a business. In the case of bank, whose stock-in-trade is money, one possible view is to regard the loans and advances made during the year as the turnover of the bank. As the banking business differs fundamentally from other types of business, in our view, the yardstick of turnover is not the appropriate one to be adopted for the purpose of section 37(3A) of the Act. The mo....