2001 (2) TMI 20 - HC - Income Tax

Weighted Deduction - The first of those questions which concerns the eligibility of the assessee to claim weighted deduction in respect of a sum said to be described as establishment charges cannot be, as conceded by counsel, brought under any of the sub-clauses of section 35B of the Income-tax Act, 1961. That claim has rightly been dis allowed. The first question is answered against the assessee. It has been held in the case of CIT v. Stepwell Industries Ltd. that the benefit of section 35B of the Act can be claimed only if the expenditure incur red can be brought under any one of the sub-clauses of that section. - second question is concerned with the claim for weighted deduction for steamer freight and insurance of CIF contract

Summary

The High Court of Madras ruled on three questions for the assessment year 1980-81. The first question, regarding weighted deduction for establishment charges, was disallowed as it did not fall under section 35B of the Income-tax Act. The second question, on weighted deduction for steamer freight and insurance of CIF contract, was allowed under sub-clause (viii) of section 35B(1)(b). The expenditure incurred was deemed admissible for weighted deduction. The judgment favored the assessee on the second question.