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TMI Blog1997 (8) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... t sales commission' 'E. C. G. C. charges' and 'foreign dealers visiting expenses' ? " The High Court declined to call for a reference under section 256(2) of the Income-tax Act, 1961. It appears that the claim for deduction under section 35B was not originally allowed at all. Thereafter, on the assessee's application an order was passed by the Commissioner of Income-tax (Appeals), Jalandhar, in which he directed certain allowances to be given on proportionate basis after verification of the assessee's claim under section 35B. The Income-tax Officer thereafter entertained the assessee's prayer for rectification of the order and allowed the assessee's claim in respect of matters like coloured albums, export staff travelling expenses, export sales commission, E. C. G. C., foreign dealers visiting expenses. Rectification under section 154 can only be made when a glaring mistake of fact or law committed by the officer passing the order becomes apparent from the record. Rectification is not possible if the question is debatable. Moreover, the point which was not examined on fact or in law cannot be dealt with as a mistake apparent on the record. The dispute raised a mixed question o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uses of clause (b) of section 35B(1). Under those circumstances, we think it fit to set aside the order of the Tribunal and send the matter back to the Tribunal to dispose of it after examining the facts afresh. The appeals are allowed. The order of the High Court as well as the appellate order of the Tribunal is set aside. There will be no order as to costs. Civil Appeal No. 7965 of 1996 : The amount involved is Rs. 10,000 only and the case being 23 years old we do not feel inclined to go into the question raised. However, we make it clear that we are not expressing any opinion on the correctness of the decision referred by the Tribunal. The appeal is dismissed. There will be no order as to costs. S. L. P. (C) No. 9027 of 1987: The special leave petition is dismissed. S. L. P. (C) No. 10982 of 1997: Leave granted. In this case a large number of questions were sought to be raised. We shall deal with only the question relating to section 35B. It appears that the Tribunal was totally unmindful of the various sub-clauses of section 35B(1)(b). Expenses can only be allowed if they are wholly and exclusively incurred for any of the purposes mentioned in these sub-clau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee must prove before the Tribunal the facts in respect of his claim. The Tribunal will examine the facts and consider the various sub-clauses of clause (b) of section 35B(1) and will decide whether the assessee is entitled to exemption under any of these sub-clauses in respect of expenses incurred. The appeals are disposed of. There will be no order as to costs. S. L. P. (C) No. 8620 of 1995: Leave granted. In this case two questions are involved. So far as section 40(c) is concerned, the appeal will have to be dismissed. So far as section 35B is concerned, the weighted deduction must be examined by the Tribunal on the basis of the facts proved by the assessee and having reference to the various sub-clauses of clause (b) of section 35B(1). If the assessee's case comes specifically within any of these sub-clauses it has to be allowed, otherwise not. The order of the High Court is set aside. The case is sent back to the Tribunal for re-examination of the case in the light of the above direction. No order as to costs. S. L. P. (C) No. 10949 of 1995: Leave granted. This case is only concerned with section 35B. The weighted deduction must be examined by the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... serted in the Act by way of amendment. When the original Act was passed section 35B was not in the statute book. The contention of Mrs. Ramachandran is that when section 35B was inserted, it was not specifically mentioned that section 35B will not apply to insurance companies. Therefore, the benefit of section 35B will have to be given to the insurance company. We are unable to accept this contention for two reasons. First, when the Act speaks of section 28 to section 43B, then each one of the sections from section 28 to section 43B will be included. The newly inserted section 35B was not specifically mentioned because it was not necessary to do so, just as it was not necessary to specifically mention section 35B in section 29, which lays down that computation of profits and gains of business or profession shall be computed in accordance with the provisions contained in sections 30 to 43C. Moreover, when the Act specifically says that profits and gains of insurance business shall be computed in accordance with the rules contained in the First Schedule then such computation has to be made according to that rule and not any other rule. We are unable to accept the contention of Mr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... more of the activities referred to in various sub-clauses of section 35B(1)(b). Therefore, in our opinion, the question must be answered in the negative and in favour of the Revenue. The Tribunal will now decide the case afresh after examining the nature of the expenditure and the purposes for which it was spent having regard to the various sub-clauses of section 35B(1)(b). The order of the High Court is set aside. The appellate order of the Tribunal is also set aside. The appeal is allowed. There will be no order as to costs. C. A. No. 7045 of 1995: The dispute in this case relates to an amount of Rs. 1,52,694 (spindle fee) paid to the Indian Cotton Mills Federation for export promotion funds. The contribution to the Indian Cotton Mills Federation does not fall within any of the sub-clauses of section 35B(1)(b). The contribution may be for the promotion of export generally but this sort of contribution to a general body or Chamber of Commerce cannot qualify for weighted deduction. The appeal is allowed. The order of the High Court as well as the appellate order of the Tribunal are set aside. There will be no order as to costs. C. A. No. 12419 of 1996: In view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he circumstances of the case, on a proper interpretation of section 35B, the Appellate Tribunal was right in law in allowing in respect of foreign claim for weighted deduction in respect of foreign sales commission, E.C.G.C. charges and expenditure on articles of presentation ?" (sic) The question relates to expenditure for which relief was claimed under section 35B. The Tribunal allowed the expenditure without specifically deciding under which clause (b) of section 35B(1), the expenditure falls. The case is remanded back to the Tribunal. The Tribunal will re-examine the case having regard to the nature of the expenditure and will try to find out whether such an expenditure qualifies for weighted deduction under section 35B. The order of the High Court is set aside. The appellate order of the Tribunal is also set aside. The Tribunal will now examine the facts of the case and find out whether the expenditure is allowable under any of the sub-clauses of section 35B(1)(b). The appeal is allowed. No order as to costs. C. A. Nos. 2230-31 of 1995: The appeals are dismissed. There will be no order as to costs. C. A. No. 3120 of 1995: The dispute in this case is about the all ..... X X X X Extracts X X X X X X X X Extracts X X X X
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