1999 (3) TMI 68

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..... he expenses incurred on freight, packing and handling, insurance and customs bonded warehouse are not eligible for weighted deduction under section 35B(1)(b) of the Income-tax Act, in spite of the fact that these expenses were incurred for organising and conducting trade fairs ? (2) Whether it was permissible for the Tribunal to adjudicate or give a finding on a question which was not agitated or in respect of which no relief was claimed or which was not in dispute and which did not form the subject-matter of the appeal ? (3) Whether, in the facts and circumstances of the case, the Tribunal was justified in allowing only 1/3rd of participation charges (Rs. 19,98,172) and construction/decoration (Rs. 55,12,683) as being eligible for weig .....

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..... struction/decoration. The expenses claimed under these heads were held by the Tribunal to partly qualify for weighted deduction under section 35B(1)(b)(i) of the Act and the assessee was held entitled to 1/3rd weighted deduction in respect of these items. Question No. (1) proposed above pertains to the first head while question No. 3 pertains to the second head. Freight, packing and handling, insurance and customs bonded warehouse : Learned counsel for the assessee submitted that the expenses incurred in connection with the above items were all eligible for weighted deduction under section 35B(1)(b). According to him, these expenses were incurred in connection with the object of the assessee, i.e., promotion of trade. He, however, c .....

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..... n 35B(1)(b) shows that none of these items can fall within the provision. Participation charges and construction/decoration : Coming to the second head regarding participation and construction/decoration expenses, the Tribunal has itself held that these expenses cannot be said to be wholly and exclusively for the purpose of publicity and advertisement. Clause (b) of section 35B(1) uses the words "incurred wholly and exclusively". Therefore, for a particular head of expenses to qualify for weighted deduction the same should be wholly and exclusively relatable to the object. Whether particular expenses were wholly or exclusively for a particular purpose or partly for that purpose is a question of fact. The Tribunal has held that since the .....

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