TMI Blog1993 (9) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1961, at the instance of the assessee, the Income-tax Appellate Tribunal has referred the following question of law to this court for opinion : " Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the assessee was not entitled to the relief under section 35B of the Income-tax Act, 1961, in respect of the following items : Rs. 1. Bank in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in respect of insurance charges also stands concluded in favour of the Revenue by the decision of this court in M. H. Daryani v. CIT [1993] 202 ITR 731 and in view of the above decision, no weighted deduction would be allowable in respect of insurance charges. The only surviving controversy is in regard to the third item of expenditure, viz., " loss on account of fluctuations in the rate of ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd exclusively on the activities specified in sub-clauses (iii) and (viii) of section 35B(1)(b) of the Act. We find it difficult to accept the above contention of the assessee. Section 35B, so far as relevant, as it stood at the material time, reads as follows : " 35B. Export markets development allowance. --(1)(a) Where an assessee, being a domestic company or a person (other than a company) wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... side India or on the insurance of such goods while in transit ;.... (viii) 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 ;...... " A bare reading of sub-clauses (iii) and (viii) clearly goes to show that these sub-clauses are confined to expenditure incurred by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the instant case on account of fluctuations in the rate of exchange of dollars purchased by it to avoid future loss due to exchange fluctuations. In view of the above discussion, we answer the question referred to us in the affirmative, i.e., in favour of the Revenue and against the assessee. Having regard to the facts and circumstances of the case, we make no order as to costs. - - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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