Section 6 - Amendment of Section 35B - Finance Act, 1978

6. Amendment of Section 35B In section 35B of the Income-tax Act, - (a) in sub-section (1), - (i) in the proviso to clause (a), after the words, figures and letters after the 28th day of February, 1973 , the words, figures and letters but before the 1st day of April, 1978 shall be inserted; (ii) in clause (b), - (1) in sub-clause (i), the words, figures and letters where such expenditure is incurred before the 1st day of April, 1978 shall be inserted at the end; (2) in sub-clause (iii), the words, figures and letters, where such expenditure is incurred before the 1st day of April, 1978 shall be inserted at the end; (b) after sub-section (1), the following sub-section shall be inserted, namely :- (1A) Notwithstanding anything contained in sub-section (1), no deduction under this section shall be allowed in relation to any expenditure incurred after 31st day of March, 1978, unless the following conditions are fulfilled, namely :- (a) the assessee referred to in that sub-section is engaged in - (i) the business of export of goods and is either a small-scale exporter or a holder of an Export House Certificate; or (ii) the business of provision of technical know-how, or the rendering or services in connection with the provision of technical know-how, to persons outside India; and (b) the expenditure referred to in that sub-section is incurred by the assessee wholly and exclusively for the purposes of the business referred to in sub-clause (i) or, as the case may be, sub-clause (ii) of clause (a). Explanation : For the purposes of this sub-section, - (a) small-scale exporter means a person who exports goods manufactured or produced in any small-scale industrial undertaking or undertakings owned by him : Provided that such person does not own any industrial undertaking which is not a small-scale industrial undertaking; (b) Export House Certificate means a valid Export House Certificate issued by Chief Controller of Imports and Exports, Government of India; (c) provision of technical know-how has the meaning assigned to it in sub-section (2) of section 80MM; (d) small-scale industrial undertaking has the meaning assigned to it in clause (2) of the Explanation below sub-section (2) of section 32A. .