9911796707
TMI Blog1999 (2) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... eipt in the assessee's hands ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the cash compensatory support did not constitute profits and gains within the meaning of section 28(i) or section 28(iv) of the Income-tax Act, 1961, but constituted a receipt on capital account only ? 4. Whether the Tribunal rightly upheld the Commissioner of Income-tax (Appeals)'s order that the assessee was entitled to weighted deduction under section 35B of the Act on commission of Rs. 12,10,893 as export sales ? 5. Whether the Tribunal was right in rejecting the Revenue's additional ground that though the amount of Rs. 12,10,893 had been considered for weighted deduction in the agreement, the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lement of Rs. 27,18,920 received by the assessee was not in the nature of capital receipt and thus taxable ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the following items are not entitled to weighted deduction under section 35B : Rs. (a) Difference in exchange rates 1,90,744 (b) Ocean freight charges on export consignment 7,22,669 (c) Forwarding charges on consignments 1,19,758 (d) Inland freight on export consignments 4,73,168 (e) Inspection fee on exports 29,381." The assessee is a private limited company and is engaged in business of manufacture and sale of hand tools in India. It also exported these items to various parts of the world. The accounting year was f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce and consequently the aforementioned questions were referred for opinion. The first question whether the Tribunal was right in law in admitting the additional grounds of appeal filed before it on May 25, 1982, is now squarely covered by the decision of the Supreme Court in National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383, holding that the Tribunal has the discretion to allow or not to allow new grounds to be raised. Even in a situation where the Tribunal is only required to consider the question of law arising from facts, which are on record in the assessment proceedings, there is no reason why such a question should not be allowed to be raised, when it is necessary to consider that question in order to correctly assess the tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7] 228 ITR 171, and of this court in CIT v. International Exporters [1998] 233 ITR 23. The amount of commission was paid in India though for export. In CIT v. Stepwell Industries Ltd. [1997] 228 ITR 171 (SC), it was held that merely because some activities took place outside India, the same will not qualify the exporter for deduction mentioned in section 35B of the Act. In International Exporters' case [1998] 233 ITR 23 (Delhi), this court held that the amount of commission paid in India though on export sales would not quality for weighted deduction under any of the sub clauses of section 35B(1)(b) of the Act. As such the question is answered in the negative in favour of the Revenue that the assessee was not entitled to weighted deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of the opinion rendered by this court while answering I.T.R. No. 223 of 1983, Gedore Tools (India) Pvt. Ltd. v. CIT [1998] 233 ITR 712, decided on March 9, 1998, that interest on post-shipment export credit loan is not an expenditure entitled for weighted deduction under section 35B of the Act. In view of the opinion rendered on questions Nos. 2 and 3 referred at the behest of the Revenue, questions Nos. 1 and 2 referred at the behest of the assessee are answered in the affirmative, in favour of the Revenue and against the assessee. Question No. 3 referred at the behest of the assessee is the one on which this court in Gedore Tools (India) Pvt Ltd v. CIT [1998] 233 ITR 712 I.T.R No. 223 of 1983 decided on March 9, 1998, rendered it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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