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TMI Blog1989 (1) TMI 162X X X X Extracts X X X X X X X X Extracts X X X X ..... edical expenses and insurance premium could not be held as perquisite for the purposes of s. 40(c) as held by the Hon'ble Delhi High Court in CIT vs. Bharat Ram Charat Ram P. Ltd. (1985) 47 CTR (Del) 5 : (1986) 157 ITR 199 (Del), and Instalment Supply Pvt. Ltd., vs. CIT (1984) 41 CTR (Del) 334 : (1984) 149 ITR 457 (Del). He also referred to a Circular of CBDT being Circular No. 376 dt., 6th Jan., 1984 reported in (1984) 38 CTR (TLT) 18 : (1984) 146 ITR (St) 62, stating that reimbursement of medical expenses by anemployer to an employee will be taxable only in excess of Rs. 5,000 per annum. He pointed out that in the case of the assessee the amount was only Rs. 5086. The excess was marginal and, therefore, the Commissioner(A) was not justifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty to foreign delegates Rs. 25,950 10. Foreign Delegation expenses Rs. 18,436 6. The assessee claimed weighted deduction under s. 35 of the Act on expenditure aggregating to Rs. 9,98,938 as detained below: (i) Expenditure on foreign travelling for export sales Rs. 2,84,448 (ii) Expenditure on foreign exhibitions Rs. 59,400 (iii) Commission to agents in foreign countries for obtaining export orders Rs. 27,428 (iv) Expenditure on advertisement and publicity outsideIndia Rs. 56,178 (v) Commission to Indian Agents Rs. 11,956 (vi) Fright and forwarding expenses Rs. 2,67,349 (vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regating to Rs. 3,26,473 was challenged. The details of this expenditure as per grounds of appeal before the CIT(A) are as under: "Export Market Development Allowance under s. 35B Rs. 3,26,473: The learned ITO did not allow the weighted deduction under s. 35B in respect of the following items: (a) Commission to Agents (Indian) . Rs. 11,956 (b) Freight Forwarding . Rs. 2,67,349 (c) Insurance charges . Rs. 27,345 (d) Salary to staff exclusively engaged in Export Department . Rs. 58,335 (e) Rent . Rs. 6,811 (f) Bank charges . Rs. 3,646 (g) Inspection charges fee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f engaged in Export Development at Rs. 58,335 being 50 per cent of the claim and on the balance amount of Rs. 58,335 the claim was not admitted. Similarly, he allowed deduction under s. 35B on 50 per cent of Rs. 6,811 out of the total claim of Rs. 13,622 and on the balance of Rs. 6811 the claim was not admitted. The Commissioner(A) not only confirmed the order of the assessing Officer in not allowing weighted deduction on 50 per cent expenditure but also withdrawn the deductions already allowed by the ITO. The ITO had also allowed weighted deduction on Commission paid to foreign agents at Rs. 22,428. The Commissioner(A) held that this had wrongly been allowed by the ITO. He, therefore, withdrew this allowance also. Consequently, ground No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as weighted deduction on the remaining expenditure of Rs. 58,335 is concerned, we are of the opinion that the same has rightly been not allowed by the ITO as well as by the CIT(A). 11. At the time of hearing of the appeal, we were given to understand that total sales of the assessee during the accounting year relevant to the assessment year under appeal were at Rs. 8,18,49,350 out of which export sales were of the order of the Rs. 31,43,400 only. Considering the magnitude of the export sales vis-a-vis total sales, we consider that weighted deduction on 50 per cent of the claim is more than reasonable for the asst. yr. 1974-75. The Tribunal had held that weighted deduction on 75 per cent of the expenditure as reasonable. No interference i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rders of the authorities below are modified accordingly. 14. On stationery and conveyance also, 50 per cent of the claim has been allowed by the Special Bench in its order referred to as (1982) 1 SOT 150 (Bom) (SB). Accordingly, we modify the orders of the lower authorities and direct the ITO to allow weighted deduction on these expenses to the extent of 50 per cent of the claim. 15. Hospitality to foreign delegates has been held to be entitled to 100 per cent weighted deduction under s. 35B in the case of the assessee itself for the asst. yrs. 1976-77 and 1977-78 in ITA No. 3293 of 1980 and ITA No. 1415 of 1981 dt., 11th June, 1982. Respectfully following the said order, we allow the claim of the assessee on this account. The orders of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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