TMI Blog1985 (12) TMI 54X X X X Extracts X X X X X X X X Extracts X X X X ..... are entitled to weighted deduction under section 35B of the Income-tax Act? 2. Whether, on the facts and in the circumstances of the case, there are materials for the Tribunal to hold that expenses towards storage and duty are incurred after the carriage of goods to the destination and is not the above finding of the Tribunal wrong and unsustainable in law and fact ?" The assessee's claim for weighted deduction under section 35B(1)(a) and (b)(iii) for the assessment years 1969-70 and 1971-72 was disallowed by the income-tax Officer. It was allowed on appeal by the Appellate Assistant Commissioner. The Revenue appealed to the Tribunal against that decision, but without success. The relevant section, in so far as it is material, read ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the carriage of goods to destinations outside India and those incurred on the insurance of such goods while in transit do not qualify for weighted deduction. According to the assessee, expenses incurred for carriage of goods after their landing at the port of destination to places where they were sold or delivered, also qualify for weighted deduction. We agree with the Tribunal that this claim is unsustainable. Goods are admittedly sold only as the assessee's goods on consignment basis by the assessee's foreign agents. When such goods are carried from the port of destination to other places where they are ultimately sold and delivered, it would still be carriage of the assessee's goods to destinations outside India and, therefore, expens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 35(B)(1)(b)(iii), expenditure incurred in connection with the carriage of goods to their destination outside India (wherever occurred) or on the insurance of goods while in transit are not entitled to weighted deduction. Therefore, the claim of deduction under section 35B is not admissible on ......... storage, duty, etc., referred to in 1 and 2 above." This is not correct. The storage and local duty were liable to be disallowed only if the carriage of the goods at the instance of the assessee did not end at the port where they were discharged by the vessel. There is no finding in the instant case that the carriage of the goods on behalf of the assessee continued even after the termination of the sea voyage. The Officer, on the other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that since these expenses go to enhance the value of the goods, they are not entitled for the weighted deduction under section 35B." The Revenue had no case that the goods were carried by or on behalf of the assessee hinterland after discharge at New York. The Revenue did not contend before the Tribunal that the section, as understood by this court in I.T.R. No. 71 of 1972 did not apply to the facts of this case on the ground that, like in the earlier case, the goods were carried onward to their places of destination by or on behalf of the assessee and, therefore, the expenses incurred in New York by way of storage or local duty were expenses which arose in the course of or in connection With the journey and were, therefore, not deductib ..... X X X X Extracts X X X X X X X X Extracts X X X X
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