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Issues:
- Interpretation of weighted deduction under section 35B of the Income-tax Act, 1961 for specific expenses related to export business. Analysis: The judgment by the High Court of Punjab and Haryana addressed the issue of allowing weighted deduction under section 35B of the Income-tax Act, 1961 for various expenses incurred by the assessee in relation to the development of exports. The specific question referred to the court was whether the Tribunal was correct in allowing weighted deduction for salary and bonus payments to certain employees, as well as expenses on telex and stationery. The court examined the facts of the case, where the Income-tax Officer had rejected certain expenses claimed by the assessee under section 35B, including salary and bonus payments to specific employees, telex expenses, and expenses on stationery. The Commissioner of Income-tax (Appeals) had accepted the appeal filed by the assessee, considering that a significant portion of the turnover was from exports. Following the decision in the case of J. Hemchand and Co., the Commissioner allowed weighted deduction for salary and bonus payments to employees exclusively involved in export business, as well as a portion of expenses on telex and stationery. The Tribunal upheld the Commissioner's decision, leading to the Revenue filing a petition for referring the matter to the High Court. The High Court examined the Tribunal's decision and found that the expenses in question were directly related to export activities and thus qualified for weighted deduction under section 35B. The court referenced previous judgments to support the allowability of weighted deduction for salary, bonus, telex expenses, and stationery expenses incurred for export promotion. The court concluded that the Tribunal's decision was correct, and the question referred to them was answered in favor of the assessee and against the Revenue. In conclusion, the judgment clarified the application of weighted deduction under section 35B of the Income-tax Act, emphasizing the direct relation of expenses to export promotion activities as a key factor in determining eligibility for such deductions. The decision provided a comprehensive analysis of the specific expenses in question and referenced relevant case law to support the interpretation of the law in this context.
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