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TMI Blog2005 (1) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... director since they had no part to play in terms of rule 6AA(c) and also that they were relatable to section 35B(1)(b)(iii) which was not operative for the assessment year in question, having been omitted by the Finance (No.2) Act, 1980, and whether the said expenditure was allowable under section 35B(1)(b)(i)? (2) Whether, on the facts and in the circumstances of the case the Appellate Tribunal erred in law in holding that weighted deduction was also not admissible with reference to stationery, printing and postage expenses on the ground that they were relatable to section 35B(1)(b)(iii) which was not operative for the assessment year in question, having been omitted by the Finance (No.2) Act, 1980 and whether the said expenditure was al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner of Income-tax (Appeals) allowed the applicant's claim of weighted deduction to the extent mentioned in column 4 of the above Table. Feeling aggrieved the Revenue preferred separate appeal before the Tribunal. The Tribunal has noticed that so far as items 1, 2 and 3 are concerned, the Commissioner of Income-tax (Appeals) has allowed the claim under section 35B(1)(b)(ix) read with rule 6AA(c) of the Income-tax Rules holding that the term "other facilities" covered the claim. However, he has restricted the allowance to 5/6ths of the claim on the ground that 5/6ths of the salary can be regarded as relating to quality control. The Tribunal has held that through the provisions of section 35B(1)(b)(ix) were dormant till they were activ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account (publicity outside India) is concerned, this expenditure was held to be clearly relatable to sub-clause (i) of section 35B(1)(b) which was operative for the assessment year in question and, therefore, weighted deduction at 100% of the claim was upheld. So far as items Nos. 5 and 6 pertaining to stationery, printing and postage are concerned, the Tribunal was of the view that they related to sub-clause (iii) of section 35B(1)(b) and that the claim of weighted deduction in respect thereof could not be allowed for the same reason for which the salaries of the managing director and directors were held to be not allowable. So far as item No.7 regarding staff welfare expenses is concerned, they were treated at par with item No.1 pertaini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the directors and managing director. So far as weighted deduction on the expenses of stationery printing and postage is concerned it is not permissible in respect of the items as it falls under sub-clause (iii) of section 35B(1)(b) of the Act as held by the apex court in the cases of CIT v. Stepwell Industries Ltd. [1991] 228 ITR 171 and CIT v. Hero Cycles (P.) Ltd. [1997] 228 ITR 463 that the expenses incurred on stationery, postage and printing do not fall under any of the clauses of section 35B(1)(b) of the Act and, therefore are not admissible for weighted deduction. So far as the claim of weighted deduction under sub-clause (i) is concerned it is wholly misconceived as under the law the expenses which have been incurred on advertise ..... X X X X Extracts X X X X X X X X Extracts X X X X
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