TMI Blog1994 (10) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... ion has been answered in Lohia Machines Ltd. v. Union of India [1985] 152 ITR 308 (SC). We hold that the decision rendered in the said reference would apply to this case on all fours. Similarly, the fourth question of law has been set out as follows : " Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the payment of Rs. 6 lakhs made on March 19, 1973, should be treated as advance tax payment ? " Here again, now it is brought to the notice of this court that in CIT v. T. T. Investments and Trades Pvt. Ltd. [1984] 148 ITR 347, an identical question was considered and decided. We are in complete agreement with the decision rendered in the said reference and we hold that the decision in that case would squarely apply to this case and will be followed in this case as well. We answer this question of law in favour of the assessee. The second question of law referred to this court reads as follows : " Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the assessee was entitled to deduction under section 35B on expenses like salary, telex, stationery, etc., much ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exclusively spent on advertisements, etc., and, consequently, the Tribunal directed that one-third of it should be further allowed as a deduction under section 35B. With regard to this issue, we are concerned with section 35B(1)(b)(i), (ii) and (v) of the Income-tax Act, 1961, which reads as follows : " 35B.Export markets development allowance.--(1)(b) The expenditure referred to in clause (a) is that incurred wholly and exclusively on-- (i) advertisement or publicity outside India in respect of the goods, services or facilities which the assessee deals in or provides in the course of his business ; (ii) obtaining information regarding markets outside India for such goods, services or facilities ;... (v) preparation and submission of tenders for the supply or provision outside India of such goods, services or facilities, and activities incidental thereto ; " According to the said provisions, the expenses incurred on advertisement, publicity, etc., obtaining information regarding markets and preparation and submission of tenders, etc., are allowed. It is needless to mention that in an export trade, expenditure on advertisement, publicity, etc., obtaining information reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trade by way of import licences and sale of commodities sought to be imported. The turnover of the export trade is about Rs. 126 lakhs. The assessee is also a partner in a hotel called 'Queens Hotel'. Under such facts and circumstances, it cannot be said that all the office staff and equipment is mainly used for advertisements, obtaining information and preparation and submission of tenders. The office and administrative staff would have been more interested in getting the import licences automatically issued to the assessee for export performance sold and transferred to others. Such activities fetch the highest profit for the assessee, say about Rs. 12 to 13 lakhs. So the concentration of the assessee would have been on getting the maximum profit from the sale of import entitlements, etc. The advertisements, obtaining information, preparation and submission of tenders, etc., would have been only subsidiary activity so far as the office of the assessee is concerned. Of course, it is vital work for export trade, but in the facts of this case the stress and concentration would have been more on the other activities like sale of import entitlements. Considering all these facts and ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration and submission of tenders for the supply or provision outside India of such goods, services or facilities, and activities incidental thereto, furnishing to a person outside India samples or technical information for the promotion of the sale of such goods, services or facilities ; for travelling outside India for the promotion of the sale outside India of such goods, services or facilities, including travelling outward from and return to India ; performance of services outside India in connection with or incidental to the execution of any contract for the supply outside India of such goods, services or facilities and such other activities for the promotion of the sale outside India of such goods, services or facilities as may be prescribed, are allowable as deduction, a sum equal to one and one-third times the amount of such expenditure incurred during the previous year. In respect of items such as advertisements or publicity outside India, obtaining information regarding markets outside India, maintenance outside India of a branch, office or agency, preparation and submission of tenders for the supply, and such other activities for the promotion of sale outside India, are c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... something which is not envisaged in the Evidence Act, and which does not fall in the realm of the discretion as to the existence of any fact. The court, Tribunal or authority may presume the existence of any fact which it thinks is likely to have happened, regard being had to the common course of natural events, human conduct and public and private business in their relation to the facts of public importance. Circumstantial evidence may take the character of proof only when it is conclusive in the sense that no other possibility is conceivable in a given case, and the only probable conclusion is the one indicated by the circumstances. In the light of the above, we think it proper to state the law as follows : (i) A person who claims that he has made certain expenditure is expected to have some documentary evidence ; (ii) In the absence of the above, he is expected to say how he incurred the expenditure and why there is no documentary proof for such expenditure, and if he has any satisfactory evidence to show that documentary evidence has been lost or destroyed, he may take recourse to secondary evidence, viz., certified copies or attested copies of such documents, or copies m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds, for the purpose of calculating allowance for a day, is it to be on the basis of 24 hours and is it that rule 6D prescribes or contemplates. The Income-tax Officer had disallowed a sum of Rs. 7,557 probably on the basis, calculating a day as 24 hours. Before the Appellate Assistant Commissioner, the assessee contended that the Income-tax Officer has disallowed certain expenses on the basis of rule 6D incorrectly and further pointed out that the rule does not specify a 24 hour period as comprising a day for the purpose of calculating allowance. We find that the Appellate Assistant Commissioner has not considered that point but would simply say, " I am, however, unable to agree. After going through the particulars furnished by the appellant in the income-tax records and schedule " A ", annexed to the assessment order, I find that the excess disallowance has been correctly worked out and in view of this, the disallowance is confirmed ". The Appellate Tribunal, while considering this issue, has pointed out that reading of schedule 'A' to the assessment order would go to show that the Income-tax Officer had followed the principle indicated by the assessee and that this method of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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