TMI Blog1993 (10) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... gible to weighted deduction under section 35B(1) of the Income-tax Act, 1961, on Rs. 20,55,145 in respect of interest paid on post-shipment loans ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee was not entitled to weighted deduction in respect of the professional charges paid for designing for undertaking the export contract under section 35B(1)(b) Of the Income-tax Act ?" The assessee is a limited company engaged in the business of manufacture and sale of sugar, alcohol products, plastic goods, industrial machinery, etc. The relevant assessment year is 1975-76. The assessee also exports its products outside India. The export turnover of the assessee during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sub-clause (viii) of clause (b) reads: "(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. " Thus, in order to fall under clause (viii), it must be : (i) an expenditure incurred wholly and exclusively on the performance of services outside India ; (ii) the services should be in connection with or incidental "to the execution of any contract for the supply outside India of such goods, services or facilities" which the assessee deals in or provides in the course of his business. In the instant case, the admitted position is that the interest was paid on loans obtained by the assessee from banks in India for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his failure, no weighted deduction can be allowed to him. In the instant case, we find that no material whatsoever is available to show that the expenditure of Rs. 20,55,145 was incurred by the assessee on any of the activities specified in sub-clause (viii) of clause (b) of section 35B(1) of the Act. In that view of the matter, we are of the clear opinion that the Tribunal was right in holding that the assessee was not entitled to weighted deduction under section 35B(1) of the Act on the interest paid by him to the banks in India and shown in the accounts as "Interest paid on Post-shipment loans". So far as the amount of Rs. 26,100 being the professional charges paid by the assessee for designing for undertaking the export contract is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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