(a) whether expenditure incurred on purchase of raw materials and payment of wages will qualify for weighted deduction within the meaning of section 35B; and (b) whether drafting of labour for execution of such a contract locally or abroad would make any difference in the claim for weighted deduction.

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..... CBDT Dated : September 4, 1975 Section(s) Referred: 35B ,35B(1)(b) Statute: Income - Tax Act, 1961 The Finance Act, 1968 has inserted section 35B in the Income-tax Act, 1961 with effect from 1st April, 1968. Under this section, domestic companies as well as non-corporate taxpayers resident in India, who have incurred any expenditure under the specified heads to promote the scale o .....

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..... ed on purchase of raw materials and payment of wages will qualify for weighted deduction within the meaning of section 35B; and (b) whether drafting of labour for execution of such a contract locally or abroad would make any difference in the claim for weighted deduction. 3. The Board has been advised that clause (viii) of section 35B allows deduction in respect of expenditure incurred on perf .....

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..... Much depends on the nature of the contract and each case has to be decided in the light of its own facts. The drafting of labour either locally or from abroad for the execution of a contract will not make any difference for weighted deduction under section 35B. 4. The above clarification may please be brought to the notice of all the officers working in your charge for their information and gui .....

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