9911796707
TMI Blog1999 (6) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... inally answered by this court in the negative i.e. in favour of the Revenue and against the assessee by judgment dated February 11, 1987, in the light of a decision of this court in I.T.R. Nos. 7 and 8 of 1982 reported in Commissioner of Income-tax vs C. Tharian and Sons [1987] 166 ITR 607. The matter was taken in appeal by the assessee before the Supreme Court. By order dated March 24, 1999, the Supreme Court remanded the matter for fresh consideration by this court with the following observations : "The High Court answered the questions quoted below in the negative and in favour of the Revenue in the light of its earlier decision in I.T.R. Nos. 7 and 8 of 1982 - Commissioner of Income-tax vs C. Tharian and Sons, Cashew Exporters, Valako ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 63,492.17 comprising the expenses incurred by way of samples, postage, cables, overseas trunk calls and foreign travelling expenses. The Income-tax Officer rejected the assessee's claim on the ground that the assessee is not an exporter and therefore not eligible for weighted deduction under section 35B. On appeal by the assessee the Commissioner of Income-tax (Appeals) held that expenses were incurred in connection with the assessee's business of rendering services of obtaining information from outside India and furnishing to non-resident customers samples and information regarding availability of materials and therefore the expenses were duly covered by sub-clauses (ii) (vi) and (vii) of section 35B(1)(b). The assessee's appeal was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollected by letters, cables overseas trunk calls and some times it is necessary to undertake travel abroad also. Up-to-date information about the market and other facilities abroad is absolutely necessary for the improvement of the assessee's business. Therefore the assessee is entitled to claim weighted deduction in respect of the above mentioned items of expenditure. In Commissioner of Income-tax vs Orient Charterers [1990] 185 ITR 354 a similar view has been taken by the Bombay High Court. The assessee in the above case was carrying on business as freight-brokers and shipping agents. In respect of services rendered and facilities granted by it in the sphere of its activities the assessee incurred certain expenditure like telex expenses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ide India. In Commissioner of Income-tax vs Hero Cycles Pvt. Ltd. [1997] 228 ITR 463 (SC), learned counsel for the Revenue wanted to place reliance on that portion of the decision which dealt with Civil Appeal No. 6942 of 1995 where it is observed that the expenditure in connection with establishment bonus leave with wages salary to directors, postage, telephone and telegram and printing and stationery is not allowable. There is nothing to show that the expenditure on postage telephone and telegram are in connection with communication to outside India. There is also no material to show as to whether the assessee therein has been doing a business similar to the assessee in the present case or whether such activities are in furtherance of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e commission payments even though made in India were entitled to weighted deduction. The Bench took the view that Commissioner of Income-tax vs C. Tharian and Sons [1987] 166 ITR 607 (Ker) which did not take into consideration the abovementioned circular was rendered per incuriam. The above view taken by this court in Commissioner of Income-tax vs Kerala Nut Food Co. [1991] 192 ITR 585, was approved by the Supreme Court in the order dated March 24 1999 remanding the present case for fresh consideration by this court. Sub-clause (ii) and sub-clause (vi) do not contain the provision that the expenditure has to be incurred outside India as in sub-clause (iii) and sub-clause (viii). There is no legal infirmity in the assessee's claim under su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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