TMI Blog1992 (12) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... ices or facilities which the assessee deals in or provides in the course of business. (iv) Maintenance outside India of a Branch, Office or agency for the promotion of sale outside India of such goods, services or facilities. " 14. The above commission has been paid outside India. The question is whether the assessee could be regarded to have maintained agency for the promotion of sale outside India. The copies of agreements with the foreign agents are on record. On examining the provisions of clauses (iv) we find that the Legislature has used disjunctive expression " Or " in clause (iv) of section 35B(1)(b) which indicates that the meaning of the words " Branch ", " Office " or " agency " occurring in the section cannot be the same. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parties whether there was any decision of Gujarat High Court on the point in controversy and we were informed that there was no direct decision of Gujarat High Court on the point in controversy. We have considered both the decisions viz., the decision of Kerala High Court and the decision of Karnataka High Court. We prefer to rely on the decision of Kerala High Court. We respectfully follow said decision and hold that the commission paid to foreign agents in respect of export of goods would be eligible for weighted deduction under section 35B(1)(b)(iv) of the Act. We further find that similar view has been taken by Special Bench of the Tribunal in the case of K. C. P. Ltd. v. ITO [1991] 38 ITD 15 (Hyd.).The Tribunal in that decision has ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the entire circumstances and facts on record. As already stated, in the relevant assessment year only clauses (i), (iv), (vii) and (ix) were in force. The Bombay High Court in the case of CIT v. Sahney Steel Press Works (P.) Ltd. [1989] 177 ITR 354 (Bom.) has held that such commission to Indian Agents would fall under clauses (ii), (vi) and (vii). Since these three clauses were not in force in the assessment year under consideration, the claim of the assessee was bound to fail, if we rely on the decision of Bombay High Court. As already stated, the assessee's counsel has relied only on clause (i). That clause pertains to expenditure on advertisement or publicity outside India in respect of goods, services or facilities which the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CBDT had accepted the decision of Special Bench of Tribunal in the case of J. Hemchand Co. and as such we should decide the present controversy in the light of the decision of the Special Bench in the case of J. Hemchand Co. We find that it is not correct to say that the CBDT had accepted in its entirety the decision of the Special Bench of the Tribunal in the case of J. Hemchand Co. In the instructions which have been reproduced it is specifically mentioned that there are several points on which the Board did not agree. There is nothing in those instructions to indicate that the Board had agreed on the decision of Special Bench as far as item of commission paid to Indian Agents was concerned. That aspect is irrelevant because we hav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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