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TMI Blog1999 (8) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... n in a sum of Rs. 4,27,256 spent for the promotion of sales outside India ?" The questions referred in I. T. R. No. 9 of 1996 for opinion of this court are as follows : "(1) Whether, on the facts and in the circumstances of the case, the assessee is entitled to claim deduction of Rs. 9,365 relating to the issue of rights shares ? (2) Whether, on the facts and in the circumstances of the case, the assessee is entitled to claim weighted deduction under section 35B, amounting to Rs. 2,02,456 in respect of brokerage and warehouse charges ? (3) Whether, on the facts and in the circumstances of the case and the claim in the case being both for brokerage and warehousing, the Tribunal is right in holding that the facts in Poopally Foods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... diture in nature. The assessee's claim for weighted deduction under section 35B in respect of brokerage and warehousing charges amounting to Rs. 2,02,456 was also rejected by the assessing officer for the reason that it would not come within the purview of section 35B. On appeal, the Commissioner (Appeals) confirmed the assessment order. Aggrieved by the above, the assessee filed second appeal before the Tribunal. The assessee's claim for deduction of Rs. 9,365 relating to issue of right shares was allowed following a decision of this court in Federal Bank Ltd. v. CIT (1989) 180 ITR 241 (Ker). The assessee's claim for weighted deduction under section 35B amounting to Rs. 2,02,456 in respect of brokerage and warehousing charges incurred up t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1961, in respect of commission payments made to agents outside India. On analysing the provisions of' section 35B(1)(b)(iv), the Supreme Court observed as follows : "The expenditure that is referred to therein has to be incurred on the maintenance outside India of a branch, office or agency for the promotion of sales outside India of the assessee's goods, services or facilities. Therefore, what is requisite is that the assessee should have maintained the branch, office or agency outside India. It is also requisite that such branch, office or agency should be for the promotion of sales outside India of the assessee's goods, services or facilities. When payment is made, as here, by an assessee of commission to agents outside India who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ales outside India proceeded to refer CIT v. Pooppally Foods. Thereafter referring to the conclusion in CIT v. Pooppally Foods to the decision of this court in CIT v. Pooppally Foods, that for being entitled to weighted deduction the foreign agency need not work as a servant exclusively for the assessee the Tribunal proceeded to uphold the finding of the Commissioner (Appeals). For the year 1984-85, the Tribunal by observing that the facts of the case are similar to just followed the decision and allowed the claim of the assessee. Learned counsel points out that there, was no consideration by the Tribunal as to whether the agent to whom commission was being paid by the assessee was an agency maintained by the assessee as contemplated in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lying on rule 6AA of the Income Tax Rules, 1962. The assessee prays that the Tribunal may be directed to consider the question whether the assessee had been maintaining an agency in the nature of the one considered by Aravinda Paramila Works v. CIT, outside India and also the question whether the Supreme Court in assessee is not entitled to weighted deduction in respect of warehousing charges by applying the provisions contained under rule 6AA(b) of the Income Tax Rules, 1962. We find merit in the contention raised by the assessee. On going through the orders passed by the Tribunal, we find that since the Tribunal was following the decision of this court it did not go into a discussion regarding the facts of the assessee's case nor it en ..... X X X X Extracts X X X X X X X X Extracts X X X X
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