TMI Blog1979 (12) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... appeals and the cross objections, more so we having been addressed in one set by both the parties, all the appeals and the cross objections have been consolidated, heard together and are being disposed of as of necessity and for the sake of convenience by this common consolidated order. 4. The assessee is aggrieved that the lower authorities have erred, both in law and on fact in rejecting the claim of the assessee for weighted deduction in terms of exports market development allowance under s. 35B of the Act on the expenditure incurred in respect of packing meant for export and sales promotion for the asst. yrs. 1974-75, 1975-76 and 1976-77 on the amount of Rs. 45,992 Rs. 77,450 and Rs. 44,004 respectively being the expenditure incurred on export sales promotion in terms of packing of goods for export. The revenue have taken the following ground in the cross objection as also in the appeal filed by it that, for the asst. yr. 1974-75 the AAC of IT has erred both in law and on facts in allowing the claim of the assessee for weighted deduction under s. 35B of the Act in respect of expenditure incurred in India relating to carriage and insurance of goods meant for export, amounting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f this fact, the ITO was of the view that the additional grounds taken before the AAC by the assessee were not new but merely an elaboration of the original grounds. The ITO having not raised any objection to the above elaborations, the AAC in appeals by the assessee, relating to the asst. yrs. 1974-75 and 1975-76 which were disposed of, by him, by a common consolidated order dt. 19th April, 1978, held that since the ITO has confirmed that the claim vis-a-vis grounds taken by the assessee relating to weighted deduction allowable in terms of export market development allowance under s.35B of the Act was made at the assessment stage. He was taking cognizance of the matter and accordingly he disposed off the appeals on merits. For these two asst. yrs. i.e. for the asst. yrs. 1974-75 and 1975-76 the claim made by the assessee, and as has since been discussed by the AAC, is as under: Asst. yr. 1974-75 Asst. yr. 1975-76 Packing expenses Rs. 45,992 Rs. 77,415 Insurance for export Rs. 10,497 Rs. 16,313 Freight Shipping Charges Rs. 59,165 Rs. 1,01,646 Certificate fee etc. Rs. 45 Rs. 76 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8,375 incurred on shipping the goods meant for export and salary paid to typist-cum-clerk engaged in the export activities and amounting to Rs. 4,439 relating to the asst. yr. 1976-77, qualify for weighted deduction in terms of export market development allowance under s. 35B of the Act. 9. At the time of hearing of these appeals and cross objections before us, Shri K.H. Kaji, the ld. Counsel for the assessee and Shri C.V. Kothari, the learned departmental representative were categorical in their assertions that the amounts spent on expenditure heads, carriage and insurance of goods, port fee, freight and shipment etc. Were covered by decision of the Special Bench of the ITAT Bombay Bench 'D' in the case of one M/s. J.H. Co., Bombay vide orders dt. 17th April, 1978, the said Special Bench rendered in ITA No. 3255 and 3330/Bom/76-77 relating to the asst. yr. 1973-74 have held that expenses relating to the head 'carriage and forwarding charges' and on the insurance of such goods while in transit did not qualify for weighted deduction under s. 35 of the Act in as much as, sub-cl. (iii) of cl. (B) of sub-s. (1) of s. 35Bof the Act specifically excludes from its operation area expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cum clerk of the assessee related, exclusively, to export activities and accordingly there was no reason why salary to the tune of 75 per cent of the claim should be allowed far weighted deduction in terms of Special Bench decision. Shri Kaji has further contended as against the gross sales of Rs. 38,50,038 and net sales of Rs. 32,08,664 And as against gross profit of Rs. 13,37,523 which works out to 41.68 per cent of the sales, the claim in terms of salary of the typist cum clerk for expenses incurred on account of export activities, accounted for a petty sum of Rs. 4,349 and in view of the matter, the whole of the claim merits to be allowed for the purpose of weighted deduction under s. 35B of the Act. 11. On its part Shri C.V. Kothari, the ld. Departmental representative has relied upon the reasoning and conclusion arrived at by the Special Bench in the case of M/s. J.H. Co., Bombay. 12. We have given the consideration to the facts of the case as also to the submission made before us by the ld. Representatives of the parties unto appeals. We feel inclined to agree with the contention of Shri Kaji that the amount of salary on which the weighted deduction under s. 35B of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee vis-a-vis expenses on packing of goods, made for export and on goods for sale within India. Shri Kaji further contended that the expenses on these packings, has been in the nature of advertisement publicity outside India and relating to the goods of the assessee and accordingly qualify for weighted deduction in terms of export market development allowance under sub-cl. (iii) of cl. (b) of sub. s. (1) of s. 35B of the Act Shri Kaji took us through various enactments to prove his point that the cartons since used by the assessee on export products were in the nature of advertisement publicity and were not packing expenses and accordingly has prayed that for all the three assessment years, in appeal, expenditure claimed by the directed to be eligible for weighted deduction under s. 35B of the Act. 16. On its part Shri C.V. Kothari, the learned departmental representative has supported the orders of the lower authorities and has additionally contended that at this stage of the Tribunal the assessee has come up with a new case inasmuch as the assessee has all along before the lower authorities was claiming that these were expenses in the nature of packing materials and not on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oods for export, these were in the nature of advertisement publicity outside India in respect of the assessee's goods. The claim of the assessee as to whether the deduction under s. 35B of the act in terms of and in lieu of these expenditure, was before the lower authorities, they have considered these expenses vis-a-vis allowability of weighted deduction thereon. The learned counsel for the assessee at our stage has neither produced any new material nor has brought our any new facts, to warrant any refusal at our stage to consider the allowability of the claim. The learned counsel for the assessee has simply relied upon the report of the Inspector of Income tax made as on 2nd Nov., 77, the said report having since been made as directed by the ITO during the assessment proceedings, as also the ld. Counsel for the assessee has placed on our file two cartons meant for packing export products of the assessee. In view of all these facts, we are of the view that the assessee has not tried to make out a new case but has prayed for consideration of the claim of the assessee which according to the ld. counsel for the assessee qualify for weighted deduction in terms of the cl. (I) of sub-cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ement has been defined under s. 2(a) of the Drugs and Magic Remedies Act 1954 as under : "advertisement" includes any notice, circular, label, wrapper, or other document, and any announcement made orally or by means or producing or transmitting light, sound or smoke". While Drug has been defined in the same Act under s. 2 (b) of the Act as under: "Drug" includes (i) a medicine for the internal or external use of human beings or animals; (ii) any substance, intended to be used for or in the diagnosis, curie, mitigation, treatment or prevention of disease in human beings or animals; (iii) any article, other than food, intended to affect or influence in any way the structure or any organic function of the body of human being or animals. (iv) any article intended for use as a component on any medicine, substance or article, referred to in sub-cl. (i), (ii) and (iii). 21. In the case of the assessee the hair oil falls within the category of medicine for the external use of human being inasmuch as the products provides for a remedy in the case of hair fall as also for darkening and softening the human hair, as such can be termed as drug. 22. 'Advertisement' has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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