Development allowance of export market & agricultural. - Income Tax - 142/CBDT

INSTRUCTION NO 142/CBDT, Dated: January 24, 1970 Section(s) Referred: 35B, 35C Statute: Income - Tax Act, 1961 Attention is invited to Board's Circular No.27 of 1969 dated the 16th August, 1969, wherein instructions have been issued for the grant of export market development allowance agricultural development allowance incurred indirectly through joint export promotion arrangements or through an approved association or body in computing the profits and gains from this business. 2. While the association or body receiving the subscriptions should be recognised by the prescribed authority, such recognition would be accorded only if the association maintains proper accounts which specifically show separately the expenditure incurred by it on the items of expenditure mentioned in section 35 B and/or 35C. The accounts of these associations should examine the accounts and ascertain the extent of the expenditure incurred by these associations on the activities mentioned in section 35B and 35C. After this is done, the proportion of the expenditure incurred by the associations on the various items mentioned in Section 35B and 35C should be worked out and circulated to the ITO's assessing the individual members of the association to enable them to claim the weighted deduction contemplated u/s.35B and 35C. It may, however, be noted that the question of subsidy from Government or reimbursement by Government of export promotion expenses to Association must be taken into account before the amount deductible in the case of members of Association can be granted. 3. It would appear necessary, therefore, to create a special circle in each C.I.T.'s charge which will have jurisdiction over all the association in that charge. The ITO would be in a position to specialise in the determination of such amounts of the expenditure as also the percentage and send a certified copy of the order. You are, hereby requested to comply with the above mentioned instructions and bring them to the notice of the ITOs working in your charge.