TMI Blog1989 (9) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... lowable in respect of inspection and supervision charges, bank charges, cost of excise revenue stamps and miscellaneous expenses and also for 50% of expenditure on stationery ?" A brief resume of facts relevant for disposal of this reference is that the applicant-assessee is a limited company. The controversy relates to the income-tax assessment year 1977-78 for which the relevant previous year ended on March 31, 1977. In the course of the assessment proceedings, the assessee had claimed weighted deduction under section 35B of the Act in respect of expenditure amounting to Rs. 10,62,723. The Income.-tax Officer allowed the claim of the assessee in respect of all the items other than freight expenses, octroi duty, insurance charges, loadin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd supervision of export goods 23,315 (ii) Bank charges paid for the export 6,173 (iii) Cost of excise revenue stamps and hundi papers for export documentation 330 (iv) Miscellaneous expenses incurred in connection with export 7,837 Feeling aggrieved against the said order of the Tribunal, the assessee filed an application under section 256(1) of the Act for making a reference to this High Court on two points. The Tribunal did not refer the question regarding the jurisdiction of the Income-tax Commissioner under section 263 of the Act but referred the above referred question for the opinion of this court. Mr. G. C. Sharma, learned senior advocate appearing on behalf of the petitioner, contended that the provisions of section 35B o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penditure incurred during the previous year : Provided that in respect of the expenditure incurred after the 28th day of February, 1973, by a domestic company, being a company in which the public are substantially interested, the provisions of this clause shall have effect as if for the words 'one and one-third times', the words 'one and one-half times' had been substituted. (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 ; (iii) dist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd not within the country. Clause (iii) specifically excludes expenditure incurred in India in connection with the distribution, supply, services or facilities as well as expenditure (wherever incurred) on the carriage of such goods to their destination outside India or on the insurance of such goods while in transit. Thus, the intent of the Legislature is very clear regarding the assessee being not entitled to any relief on expenditure on the carriage of such goods to their destination outside India or on the insurance of such goods while in transit even outside India. Under these circumstances, the Tribunal rightly upheld the order of the Income-tax Commissioner regarding the assessee being not entitled to any weighted deduction on the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture (wherever incurred) on the carriage of the goods to their destination outside India or on the insurance of the goods while in transit. It appears to us that there are three prohibitions in sub-clause (iii) of section 35B(1)(b). Firstly, expenditure incurred in India in connection with distribution, supply or provision outside India of such goods, services or facilities. Secondly, expenditure whether incurred in India or outside India, on the carriage of such goods to their destination outside India (i.e., freight, etc.) and thirdly, expenditure, whether incurred in India or outside India, on the insurance of such goods while in transit. Having regard to the provisions of section 35B(1)(b)(iii) and the decisions referred to above, ite ..... X X X X Extracts X X X X X X X X Extracts X X X X
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