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TMI Blog1998 (3) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... ligible for relief under section 35B ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the expenditure on travelling in India by the company's export department in connection with exports, is not eligible for weighted deduction under section 35B ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the gratuity paid to the employees in excess of the amount exempt under section 10(10)(iii) is to be included in remuneration for the purpose of applying the ceiling limit under section 40A(5) ? 4. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the proportionate amount of cash assistance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 1,48,484 under section 40A(5) of the Act in respect of the employees other than the directors. The Income-tax Officer was of the view that the exemption provided under section 40A(5) of the Act did not provide for exclusion of the gratuity payment and, therefore, included the amount of Rs. 1 lakh in the case of S. P. Bhatacharaya as the amount paid exceeded the limit prescribed under section 40A(5) of the Act. The Commissioner of Income-tax (Appeals), on appeal by the assessee, held that to the extent gratuity is exempt under section 10(10)(iii) in the hands of employees, it should be excluded from the purview of section 40A(5) of the Act and only the balance of the gratuity should be included in the salary for the purpose of disallowanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d proposition of law that unless the assessee establishes that the expenditure incurred falls under any of the sub-clauses of section 35B(1)(b) of the Act, the assessee is not entitled to weighted deduction. The finding of the Appellate Tribunal is that the bank charges incurred by the assessee did not fall within any of the sub-clauses of section 35B(1)(b) of the Act, and, therefore, the Tribunal was right in holding that the assessee is not eligible to claim weighted deduction in respect of the bank charges. The assessee has also not furnished any details of materials to show that its claim would fall under any of the sub-clauses of section 35B(1)(b) of the Act and in the absence of any material, the claim of the assessee for weighted ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to secure information regarding the import and for preparation and submission of tenders. Unfortunately, the Tribunal has not examined the case of the assessee whether the expenditure claimed by the assessee would fall under section 35B(1)(b)(ii) of the Act and since there cannot be any blank disallowance and the case put forward by the assessee was not examined by the Appellate Tribunal, we are of the opinion that the Tribunal should consider the question afresh and determine whether the assessee is eligible for weighted deduction under section 35B(1)(b)(ii) of the Act. The Tribunal is perfectly justified in holding that the case of the assessee does not fall under section 35B(1)(b)(vii) of the Act as the said sub-clause deals with the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 80HH of the Act is concerned, it is fairly conceded by learned counsel for the assessee that this court in T. C. Nos. 953 to 956 of 1985 by order dated March 3, 1998, an unreported decision (CIT v. Pondicherry Distilleries Ltd. [2000] 241 ITR 802 (Appex.)) has held that the cash assistance received on exports would not qualify for any deduction under section 80HH of the Act. Following the said judgment, we hold that the Tribunal was right in holding that the proportionate amounts of cash assistance on exports do not qualify for deduction under section 80HH of the Act. Accordingly, we answer the fourth question of law referred to us in the affirmative and against the assessee. Our answer to the questions of law referred to us ..... X X X X Extracts X X X X X X X X Extracts X X X X
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