TMI Blog1993 (3) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... tion under section 35B of the Income-tax Act, 1961 ? (ii) Whether, on the facts and in the circumstances of the case and since the assessee is not qualified and entitled to deduction under section 36(1)(iv) of the Income-tax Act, the contribution made to the Executive Staff Provident Fund is a permissible deduction under section 37 of the Income-tax Act, 1961 The assessee is a public limited company carrying on the business of manufacture and sale of coffee and purchase and sale of coir yarn. For the assessment year 1977-78, the assessee returned an income of Rs. 14,59,212 and claimed deduction of Rs. 52,781 being contribution to the Executive Staff Provident Fund Account and a further sum of Rs. 58,312 under section 35B of the Income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... restricted to Rs. 36,488 and the same was allowed in addition to what was already allowed by the Income-tax Officer. The Commissioner of Income-tax required the Appellate Tribunal to refer the questions of law arising out of the order to this court. The Tribunal refused to state the case on the ground that no question of law arises. It was thereafter that the Revenue moved this court under section 256(2) of the Income-tax Act, 1961, by Original Petition No. 4278 of 1981. In accordance with the judgment of this court in that original petition, the questions of law hereinbefore mentioned were referred by the Tribunal under section 256(2) of the Income-tax Act, 1961. Heard counsel on both sides. Deduction of Rs. 72,896 was claimed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e seen to have been adopted by the Tribunal while allowing weighted deduction to the extent of Rs. 36,448. It is thus clear that what has been allowed is only the expenses incurred towards salaries paid to the employees in the appellant's export department and the commission Raid to the export adviser. A question, therefore, arises as to whether allowances can be claimed for these amounts. This Bench had occasion to consider the eligibility of weighted deduction in respect of commission paid to agents for marketing of goods outside India as well as commission paid in India. After referring to the various sub-clauses in section 35B(1) as it stood then and the circular of the Central Board of Direct Taxes, this court held that the commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his business and for obtaining information regarding markets outside India for such goods, services or facilities. Sub-clauses (v) and (vi) of section 35B(1)(b) relate to expenditure incurred for preparation and submission of tenders for the supply or provision outside India of such goods, services or facilities, and activities incidental thereto and for furnishing to a person outside India samples or technical information for the promotion of the sale of such goods, services or facilities. The Tribunal has found that, in the instant case, the claim of weighted deduction in respect of 50 per cent, of the salary paid to the staff and 50 per cent. of the remuneration paid to the export adviser is not made under sub-clause (iii) but under sub- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Staff Provident Fund. The contention of the Revenue is that this amount is not a permissible deduction under section 37 of the Act since the assessee is not qualified and entitled to deduction under section 36(1)(iv) of the Act. An identical question was considered by a Bench of this court in respect of the same assessee in CIT v. Aspinwall and Co. (Travancore) Ltd. [1992] 194 ITR 739. The question referred in that case was "whether, on the facts and in the circumstances of the case, the assessee is entitled to claim deduction of the contribution of Rs. 90,220 made to the unrecognised Executive Staff Provident Fund ?" The very same contention that deduction cannot be claimed under section 37 of the Act in view of the specific provision mad ..... X X X X Extracts X X X X X X X X Extracts X X X X
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