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TMI Blog1998 (12) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... ether, on the facts and circumstances of the case, the Appellate Tribunal was right in law in not having allowed weighted deduction under section 35B on the following expenditure (i) incurred on sea and air freight and marine insurance on exports (ii) incurred on air freight on goods sent for exhibition, which came back ; (iii) incurred on customs duty paid on designs received from foreign countries ; and (iv) incurred on internal telex, i.e., within the country." The assessee was engaged in the business of export of goods outside India. The assessee claimed export markets development allowance under section 35B of the Act in respect of certain expenditure. The Assessing Officer allowed deductions under section 35B concerning cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) of section 35B(1) is relevant and it reads as under : "(i) advertisement or publicity outside India in respect of the goods, services or facilities which the assessee deals in or provides in the course of his business, where such expenditure is incurred before the 1st day of April, 1978 ;" It is apparent from the nature of expenditure incurred by the assessee that certain goods were sent for exhibition to a foreign country and the goods were received back thereafter. Goods were, thus, sent for the purpose of advertisement and publicity through an exhibition. In this light, expenditure incurred on air freight in respect of the goods sent for advertisement or publicity may be covered under sub-clause (i). Sri R. P. Sawhney, learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds sent for exhibition outside India. There is no dispute to the claim of the assessee that the goods were sent outside India for the purpose of advertisement and publicity through an exhibition. When sub-clause (i) specifically permits expenditure on advertisement and publicity outside India in respect of the goods, services or facilities, deduction shall have to be allowed under that specific sub-clause. Sub-clause (iii) is not attracted inasmuch as it only prohibits expenditure on freight and insurance incurred on the distribution or supply of goods outside India. In view of the above, it is held that the expenditure incurred by the assessee on air freight in respect of the goods sent for exhibition outside India is eligible for deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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