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TMI Blog2002 (9) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... ances of the case, the assessee is entitled to weighted deduction on the expenditure incurred on packing materials and printing and if weighted deduction is allowable whether the Tribunal was justified in allowing it on 50 per cent. of the expenses? 5. Whether, on the facts and in the circumstances of the case, the asses see is entitled to weighted deduction in respect of the items relating to prospect estate and warehousing charges and that too fully in respect of ware housing charges? 6. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee was entitled to claim deduction of the commission paid to Tara Agencies "Assessment year 1979-80: 1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in allowing weighted deduction under section 35B of 75 per cent. of the expenditure on salary and bonus and 50 per cent. of the other expenditure and motor-car expenses? 2. Whether, on the facts and in the circumstances of the case, the asses see is entitled to weighted deduction on the interest paid on shipping loan and in respect of a portion of the banking charges as expenditure incurred in Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time of argument, it was agreed that the questions of law can be classified into seven categories: (1) weighted deduction under section 35B of 75 per cent. of the expenditure on salary and bonus and 50 per cent. of other expenditure including godown rent and motor-car expenses; (2) weighted deduction under section 35B of 50 per cent. of the expenditure incurred on packing materials and printing; (3) weighted deduction under section 35B in respect of interest paid on shipping loan and bank charges; (4) weighted deduction under section 35B of commission paid to agent abroad; (5) deduction of bank guarantee commission as revenue expenditure; (6) deduction under section 37 of bonus paid in excess of the limit specified in section 36(1)(ii) of the Income-tax Act; and (7) deduction under section 37 of the commission paid to Tara Agencies and Bhansali Brothers. The first question is regarding the weighted deduction under section 35B of 75 per cent. of the expenditure on salary and bonus and 50 per cent. of other expenditure including godown rent and motor-car expenses. The Tribunal in this case relied on the decision of the Special Bench of the Tribunal in the case of J. Hemchand & C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e question whether the expenditure was wholly or exclusively incurred for the purposes of any of the sub-clauses mentioned in clause (b) of section 35B(1). In the above view of the facts, this matter has to be examined by the Tribunal to determine the proportionate deduction depending upon the number of persons working in the exports division. The next question is with regard to weighted deduction under section 35B of 50 per cent. of the expenditure incurred on packing materials and printing. The weighted deduction was allowed on printing expenses. However, weighted deduction was not allowed on packing materials and special chest. The assessee had contended before the departmental authorities that printing cannot be done save on a medium and in the instant cases, the medium of printing was the packing material and special chest. The Tribunal found in favour of the assessee because the packing materials and special chest had special markings on them to indicate that they were meant for the foreign market. Hence, the assessee claimed that it is entitled to claim weighted deduction. So far as this aspect is concerned, the Division Bench decision of this court in Kesaria Tea Co. Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 40A(2)(a). The assessee contended that all the points raised before the Tribunal were considered by the Tribunal. But learned counsel for the Revenue contended that the Revenue is entitled to raise the above legal contention though raised for the first time before this court. All the necessary findings required to consider the question have been found by the Tribunal and the same are before this court. The following observation of the Supreme Court in Salem Co-operative Central Bank Ltd. v. CIT [1993] 201 ITR 697, 701, 703, would support the contention of the Revenue. The observations of the Supreme Court read thus: "'This court cannot look on helplessly with reference to an error which is manifested in the contention of both sides before the Tribunal. This court has jurisdiction to correct an error in the order of the Tribunal so long as the point arose out of its order, whoever be the author of the mistake or error in taking up a particular contention. Having regard to the nature of the issue that was before the Tribunal and having regard to what we have stated above, we think it proper to set aside the order of the Tribunal and direct the Tribunal to consider th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue. Question No. 2 is remanded to the Tribunal. Question No. 3 is answered in favour of the Revenue and against the assessee. Question No. 4 is answered in favour of the Revenue and against the assessee. Question No. 5 is answered in favour of the Revenue and against the assessee. Question No. 6 is remanded to the Tribunal. For the assessment year 1979-80: Question No. 1 is similar to question No. 2 for the assessment year 1978-79 and hence it is remanded. Question No. 2 is similar to question No. 3 for the assessment year 1978-79 and hence question No. 2 is answered in favour of the Revenue and against the assessee. Question No. 3 is similar to question No. 4 for the assessment year 1978-79 and hence question No. 3 is answered in favour of the Revenue and against the assessee. Question No. 4 is similar to question No. 5 for the assessment year 1978-79 and hence question No. 4 is answered in favour of the Revenue and against the assessee. Question No. 5 is similar to question No. 6 for the assessment year 1978-79 and hence it is remanded. For the assessment year 1980-81 Question No. 1 is similar to question No. 2 for the assessment year 1978-79 and hence, it is reman ..... X X X X Extracts X X X X X X X X Extracts X X X X
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