TMI Blog1993 (10) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... , on the facts and in the circumstances of the case, the weighted deduction under section 35B was not allowable in respect of items totalling up to Rs. 1,21,000?" The aforesaid questions of law arise in the background of the following facts : In the return of income for the assessment year 1972-73, the assessee claimed deduction of various expenses including the deduction of expenses incurred for foreign tours undertaken by the director and the employees of the assessee-company for the purpose of establishing joint venture units in countries such as Malaysia, Indonesia, Philippines, Mauritius, Nigeria, Nairobi, Kenya, etc. The Income-tax Officer disallowed the said claim and the Appellate Assistant Commissioner of Income-tax confirmed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gn travel of its employees for exploring the possibility of establishing a joint venture unit in Malaysia and claimed deduction of the said expenditure. The court held that there was nothing on record to indicate that business organisation, administration and funds of both the units were to be common and in fact from the facts of that case it was clear that the business organisation, administration and funds of the assessee's unit in India and the proposed unit in Malaysia were not going to be common. There was not going to be complete inter-connection, interlacing and interdependence of both the units. The court, therefore, held that it is difficult to say that the manufacturing unit, which was to be started in Malaysia, was part of the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gn tour expenses to the tune of Rs. 1,61,827 were not allowable as revenue expenses. Question No. 2 : The answer to question No. 2 is dependent upon the answer to question No. 1. Under section 35B(1)(a) of the Income-tax Act, it is specifically provided that export markets development allowance would be granted if it is not in the nature of capital expenditure or personal expenses of the assessee. As we have held that the expenditure incurred for foreign tours was in the nature of capital expenditure, the assessee was not entitled to get weighted deduction under section 35B of the Income-tax Act. Hence, the Tribunal has rightly held that the said deduction was not allowable. Hence, question No. 2 is answered in the affirmative, i.e., in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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