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Issues involved:
Interpretation of section 35B(1)(b)(iii) of the Income-tax Act, 1961 regarding weighted deduction for expenditure incurred on carriage of goods to destination outside India and insurance of goods while in transit. Summary: The High Court of Bombay addressed a reference under section 256(1) of the Income-tax Act, 1961, concerning a dispute over the claim of weighted deduction under section 35B(1)(b)(iii) for expenditure on carriage and insurance of goods for export. The assessee, an individual engaged in textile export, sought deduction for expenses incurred in India for transporting goods abroad and insuring them during transit in the assessment year 1973-74. The Income-tax Officer disallowed the claim, a decision upheld by the Appellate Assistant Commissioner and the Tribunal, leading to this reference. Section 35B of the Act allows for export markets development allowance, providing a weighted deduction for qualifying expenditures incurred during the previous year. The specific issue revolved around whether the expenditure on carriage and insurance of goods to their destination outside India qualified for weighted deduction under section 35B(1)(b)(iii). The court highlighted the relevant provisions of the Act, emphasizing the conditions for claiming such deductions and the limitations imposed by the Finance Act, 1970. The court examined the language and intent of the statute, concluding that the assessee's expenditure on carriage and insurance of goods did not meet the criteria for weighted deduction as per section 35B(1)(b)(iii). The judgment emphasized that the statutory provisions should be construed according to their plain natural meaning when clear and unambiguous, without straining to provide relief to the assessee. The principle of beneficial interpretation was deemed applicable only in cases of genuine ambiguity, not where the statute's language was precise. In light of the above analysis, the court ruled in favor of the Revenue and against the assessee, denying the claim for weighted deduction. No costs were awarded in this matter.
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