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TMI Blog1980 (2) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... s stated above and also on export staff remuneration. The AAC allowed the four items mentioned and hence the present appeal by the Department. 3. Commission paid to State Trading Corporation of Rs. 2,42,670: The main objection of the Department is that these are all expenses incurred by the assessee within India and export market development allowance under s. 35-B is admissible only for expenses incurred outside India. Various Benches of the Madras Tribunal as well as the Bombay Tribunal had held that there is no question of s. 35-B deduction being limited only to expenses incurred outside India. Even expenses incurred within Indian if it conformed to the various sub-cls. of s. 35-B are eligible for weighted deduction. The State Tradin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the assessee and the State Trading Corporation is having branch offices in various foreign countries and the assessee can utilise their services whenever required. Since the exports to foreign market can be made only through the State Trading Corporation the commission paid to the State Trading Corporation is entitled to weighted deduction. Services rendered by the State Trading Corporation come under sub-s. (i), (ii), (iv) and (vi). As such the AAC was justified in granting weighted deduction in respect of the commission paid to the State Trading Corporation. 5. Commission paid to local agents of foreign buyers of Rs. 1,85,910: Here also the objection of the Deptt. seems to be that since the commission was paid to local agents and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rought to our notice to substantiate that. 7. The commission paid to local agents are for services rendered which fall under ss. 35B(1)(b)(i) and (vi). In as much as the commission payments in question fall under sub-cl. (I)(b)(i) and (vi) the AAC is justified in allowing weighted deduction on these items. 8. Interest payment to bankers: Here also the main objection of the Department seems to be that the expenses are incurred within India and not outside India. This contention cannot be upheld. As soon as the documents are negotiated through bank, the assessee is allowed to draw 100 per cent of the invoice value. The bank applies the exchange rate depending upon the tenor of the bill. If the bill is not paid within the due date, the for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e foreign agent's income. He has also observed that the charging of discount finds place only on the bills and not reflected in the accounts. The assessees had not recorded in his accounts the gross sales and the discount paid. The assessee is not permitted to show the discount in his accounts is only a notional one and does not exist in reality, and the assessee never paid the discount as claimed. However, it is seen from the AAC's order that discounts were paid to the foreign buyers. The AAC points out that Trade discount is part and parcel of contract for sale and is covered by s. 35-B. The trade discount claimed is only reduction in sale price and not an expenditure to the assessee for the purpose of the s. 35-B. The Department relies o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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