1998 (12) TMI 60

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..... ts and in the circumstances of the case, the assessee was entitled to the export markets development allowance by way of weighted deduction in terms of section 35B of the Income-tax Act, 1961, in respect of the following expenditure : Rs. (a) Bank commission of foreign bills 19,578 (b) Interest paid to bank on foreign bills 3,66,032 (c) Transit insurance charges 95,947 (d) Clearing and forwarding charges 18,59,050 (e) Carriage outward expenses 2,97,532 2. Whether on the facts and in the circumstances of the case, the expenditure of Rs. 7,095 as under spent by way of business expenditure is in the nature of entertainment expenditure so as to call for disallowance: Rs. (i) Hotel .....

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..... Industries Ltd. [1997] 228 ITR 171, has held as under (page 174) : "In order to get this kind of deduction, the onus lies heavily on the assessee to prove that the expenditure falls within any of the purposes set out in the various sub-clauses of clause (b) of section 35B(1). Merely because some activities took place outside India that will not qualify the expenditure for the deductions mentioned in section 35B. In order to get this deduction, the assessee will have to prove that the expenditure was incurred during the previous year wholly and exclusively for the purposes set out in clause (b) of section 35B(1). There cannot be any blanket allowance of the expenditure nor can there be any blanket disallowance. Every case has to be disc .....

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..... o their destination or on the insurance of such goods while in transit, is not qualified for deduction. Clearing and forwarding charges are also not covered under any of the sub-clauses of clause (b) of section 35B(1) of the Act. Learned counsel for the assessee has not been able to show as to which sub-clause would be attracted for the purpose of allowing deduction. In view of the above, question No. 1 is answered in the negative, i.e., against the assessee and in favour of the Revenue. The Assessing Officer disallowed expenditures incurred by the assessee on hotel bills and on payment to the Diners Club as well as money spent on dinner to foreign dealers. Shri S. S. Mahajan, learned counsel for the assessee, has argued that the .....

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