TMI Blog1997 (2) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1961, in respect of the commission of Rs. 22,322 paid to Amalgamations Ltd., Madras, for the assessment year 1976-77 ? The assessee is a company engaged in the manufacture of fly wheel starter and ring gears (automobile components). For the assessment year 1976-77, the assessee returned a total income of Rs. 17,35,871 under the head "Business" and the assessee claimed weighted deduction under section 35B of the Income-tax Act for a sum of Rs. 22,322 on the ground that the sum represented the assessee's share of export promotion division expenses, which was paid to another company called Amalgamations Limited. The claim of the assessee was that it did not have direct access for the export of the assessee's goods, nor did it have direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was ultimately shared by the assessee with the other companies in this group, and, hence, the Commissioner of Income-tax (Appeals) held that the assessee was entitled to weighted deduction under section 35B in respect of Rs. 22,322. The Revenue carried the matter in appeal before the Income-tax Appellate Tribunal. The Appellate Tribunal following its earlier order in the case of ITO v. L. M. Van Moopes Diamond Tools India Ltd. (I.T.A. Nos. 1480 and 1481/.Mds of 1979, dated May 28, 1980), held that the payments made by the assessee were towards the expenses of Amalgamations Limited for procuring the business in a foreign market and the assessee was entitled to weighted deduction under section 35B of the Act. The Appellate Tribunal noticed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction when the assessee incurs the expenditure directly or in association with any other person. Viewed from any angle, whether the assessee incurs the expenditure directly or incurs the expenditure in association with others, the assessee can claim weighted deduction provided the expenses claimed fall within any of the provisions of section 35B(1)(b) of ,the Act and not prohibited by the same sub-section. In view of the provisions set out in section 35B of the Act, the order of the Appellate Tribunal holding that the assessee is entitled to weighted deduction under section 35B of the Act is in order. Mr. S.V. Subramaniam, learned senior counsel for the Revenue, has argued that the same reasons would not apply to the five per cent. commis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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