TMI Blog2003 (7) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax Act, 1961, concerning assessment year 1972-73. For the sake of convenience, question No.2 is required to be answered in the first instance. Question No.2: "Whether the assessee was entitled to weighted deduction under section 35B(1)(b)(viii) of the Income-tax Act in connection with expenditure incurred for performance of service outside India?" Facts: The assessee, M/s. Shapoorji Pallonji and Co. have been carrying on business in building construction. In 1970, the assessee submitted a tender for constructing a Palace at Muscat for His Majesty, the Sultan of Oman. For the assessment year in question, the assessee submitted his claim for weighted deduction under section 35B of the Income-tax Act. The deduction claimed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... secondly, the expenditure should also be incurred outside India. It was contended that both the conditions were required to be satisfied. It was argued that in the present case, the expenditure was incurred in India and not outside India and, therefore, section 35B(1)(b)(viii) was not attracted. Findings: Before we deal with the contentions advanced on behalf of the Department, we may point out that in this reference we are concerned with the assessment year 1972-73. Section 35B deals with export markets development allowance. Under section 35B(1)(a) it is, inter alia, provided that where an assessee, who is a resident in India, has incurred directly or in association with any other person, any expenditure referred to in clause (b) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e India of such goods/services if incurred in India. That, sub-clause (iii) is a specific prohibition and it has not to be confused with the general provision enshrined in sub-clause (viii) of clause (b) of sub-section (1) of section 35B of the Income-tax Act. In this case, we are concerned with sub-clause (viii), which is a general provision and in which there is no prohibition on weighted deduction as is provided for in sub-clause (iii). Sub-clause (viii) merely states that where expenditure is incurred wholly and exclusively on performance of service outside India in connection with the execution of contract for supply of goods/services outside India, the assessee would be entitled to weighted deduction. In sub-clause (viii), there is no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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