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TMI Blog1997 (7) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... ate assessments would have to be made in this case even if the ITO considers it to be a case of change in the constitution of the firm under s. 187(2) of the IT Act, 1961 ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the assessee was entitled to weighted deduction under s. 35B in respect of the expenditure on advertisement, stationery and printing, postage and telephone expenses as claimed by the assessee ? 4. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law and in holding that the assessee was entitled to weighted deduction under s. 35B in respect of expenditure on salaries relatable to exports?" The aforesaid questions ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther there should be one assessment for the entire year or two and the answer to this is to be found, as rightly done by the learned AAC, in the ruling of the Allahabad High Court in CIT vs. Shiv Shanker Lal Ram Nath 1975 CTR (All) 22 : (1977) 106 ITR 342 (All) : TC 34R.461. Referring to the case of CIT vs. Shiv Shanker Lal Ram Nath (supra), the Tribunal held as follows : "We hold that the learned AAC was correct in holding that two separate assessments should be made." 3. From the facts as found by the Tribunal, it is manifest that the partnership deed contains an agreement to the contrary that despite death of one of the partners the firm would not be dissolved, but the business of the firm would be continued by other partners. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner dies and the partnership deed provides that death shall not result in the dissolution of the partnership. Such provision is lawful because s. 42 of the Partnership Act contemplates it. If there is no such provision and a partner dies, the partnership stands dissolved. The partnership does not then survive upon the death of the partner. The case is not one of a change in the constitution of the partnership. It falls outside the scope of s. 187. When the surviving partners in such a case continue the business in partnership. Sec. 188 is attracted for there is a succession of one by another partnership." 4. From the above reproduced observations, it is manifest that if there is an agreement to the contrary in the partnership deed, then ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act. The Tribunal stated the facts and the finding of the ITO as follows : "The business of the assessee-firm consists of the purchases and sale of jewellery, precious stones and handicrafts. The assessee has export business also. It claimed deduction under s. 35B in respect of expenditure on advertisement, cost on samples, stationery and printing, salaries, postage, T.A. and telephone. The total claim of allowance was Rs. 8,377 for the first period and Rs. 1,854 for the second period being 1/3rd of the expenditure incurred on the above items. The ITO held that the expenditure incurred on the cost of samples was wholly and exclusively for exports and was entitled to weighted deduction. Again expenses on TA were in connection with f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gn countries and for photographs was wholly related to exports and was entitled to weighted deduction. Similarly expenditure incurred on printing of catalogues and other advertising materials were also entitled to weighted deduction. The expenditure on telephones and cables sent to foreign countries was also entitled for weighted deduction. Following the earlier order we allow the assessee's claim in full. We would like to point out that as is clear from the statements on Page-2 of the paper book, the assessee has not claimed the entire expenditure on advertisement, printing and stationery, for telephones and cables or for foreign postage as incurred by it but only part of it for purposes of weighted deduction. The claim shall, therefore, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... do not indicate that only that expenditure will qualify for weighted deduction, which has been made outside India. The only requirement is that the expenditure should be such which is incurred wholly and exclusively on advertisement or publicity made outside India or on other items as mentioned in other sub-clauses of cl. (b). The expenditure should be wholly and exclusively incurred for the promotion of exports. It cannot be said that the expenditure which is made abroad that only qualifies for weighted deduction. The law is that expenditure wholly or exclusively incurred for the purposes of the export business will qualify for weighted deduction. The Tribunal clearly found that the expenditure in respect of which weighted deduction ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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