1994 (10) TMI 51 - HC - Income Tax

Summary

Issues:
1. Eligibility of contribution to Coir Promotion Fund for weighted deduction under section 35B.
2. Classification of payments made to Overseas Agencies as agency commissions for weighted deduction under section 35B.
3. Determination of expenditure nature under sub-clause (viii) of section 35B(1)(b).

Analysis:

The High Court of Kerala addressed three questions referred by the Income-tax Appellate Tribunal. The first issue pertained to the eligibility of a contribution to the Coir Promotion Fund for weighted deduction under section 35B. The court relied on a prior decision and held that the amount returned by the Coir Board in subsequent years could not be considered as expenses incurred by the assessee. Referring to a specific case, the court concluded that no expenditure existed due to the nature of the transaction, thus denying the weighted deduction under section 35B. The court answered question No. 1 against the assessee and in favor of the Revenue based on the previous decision.

Regarding the second and third questions, the court noted that similar issues had been referred previously and remitted back to the Tribunal for fresh consideration. The court highlighted a lack of information on the progress of the matter after remand in a previous case. As a result, the court declined to answer questions 2 and 3, directing the Tribunal to reconsider the issues in light of previous observations and decisions. The court emphasized the need for a fresh examination of the matters in question based on the prior references and observations made by the court.

In conclusion, the High Court ruled against the assessee on the first issue concerning the Coir Promotion Fund contribution's eligibility for weighted deduction. However, questions related to payments made to Overseas Agencies and the nature of expenditure under a specific section were remitted back to the Tribunal for further consideration. The court instructed the Tribunal to reevaluate the issues in accordance with the court's previous decisions and observations, without awarding any costs in this matter.