1985 (5) TMI 92 - AT - Income Tax

Summary

Issues:
1. Weighted deduction under s. 35B for various expenses
2. Claim of relief under s. 80J on Electroplating unit

Analysis:

1. Weighted Deduction under s. 35B:
- Initially, the assessee raised two grounds related to weighted deduction under s. 35B for specific expenses. Later, two additional grounds were raised concerning ECGC, salary, and office expenses.
- The Tribunal found that the additional grounds raised by the assessee were supported by previous decisions in the assessee's own case and a Special Bench decision.
- The Tribunal directed the ITO to grant weighted deduction to the assessee at specified percentages for ECGC, salary, and office expenses.
- Regarding the substantial ground of weighted deduction on various items like clearing and forwarding charges, carriage outward, insurance, interest, and bank commission, the Tribunal noted previous decisions in the assessee's case and a Special Bench decision.
- The Tribunal considered the arguments presented by both parties but confirmed the first appellate authority's decision regarding most items except for interest on packing credit.
- The Tribunal allowed the assessee's claim for weighted deduction under s. 35B for interest on packing credit based on relevant case law and bank certificate provided by the assessee.

2. Claim of Relief under s. 80J:
- The assessee claimed relief under s. 80J for the Electroplating unit, arguing that the relief should be allowed for five years from the start of the unit.
- There was a discrepancy in the assessment years mentioned in the CIT (A) order, leading to confusion regarding the eligibility period for s. 80J relief.
- The Tribunal accepted the assessee's contention that the relief should continue for five years from the first year it was allowed, entitling the assessee to claim relief for the relevant assessment year under consideration.

In conclusion, the Tribunal partly allowed the cross objection of the assessee, granting relief in terms of weighted deductions under s. 35B for specific expenses and confirming the entitlement to s. 80J relief for the Electroplating unit for the relevant assessment year.