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TMI Blog1995 (11) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal was justified in holding that the surtax payable by the assessee is not deductible in arriving at the total income ? 4. Whether, on the facts and in the circumstances of the case, the Tribunal erred in law in holding that extra-shift allowance of Rs. 3,66,496 was not allowable in respect of the plant in question ? 5. Whether, on the facts and in the circumstances of the case, the Tribunal erred in law in holding that provisions of section 40A(5) would be applicable in respect of the period of the employment of the employees outside India ?" So far as question No. 1 is concerned, it is covered in favour of the Revenue by the decision of this court in Carona Sahu Co. Ltd. v. CIT [1995] 213 ITR 106. Accordingly, following the same, we answer the above question in the negative and in favour of the Revenue. So far as question No. 3 is concerned, this is also covered in favour of the Revenue by the decision of this court in Lubrizol India Ltd. v. CIT [1991] 187 ITR 25. Following the same, it is answered in the affirmative and in favour of the Revenue. So far as question No. 5 is concerned, counsel for the assessee submits that having regard to the paucity of facts, h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Sd.)." The assessee-company had received the sale proceeds in India. Thereafter, the assessee approached the Reserve Bank of India for remitting 6.5 per cent. of the f.o.b. value of the goods back to the purchasers. This was in accordance with the direction of the purchaser companies as could be seen in their letter quoted above. The Reserve Bank permitted the assessee-company to remit the amount. The amounts remitted in sales made to the two organisations, who were making purchases from the assessee, were Rs. 7,11,612. The assessee claimed that this amount was paid as commission to the party concerned in West Germany for securing business and, therefore, it was entitled to weighted deduction in respect thereof under section 35B of the Act. The Income-tax Officer refused to allow the deduction as the details of the commission showed that the goods had been sold by the assessee to the very same party to whom the commission had been paid. This amount, according to the Income-tax Officer, was, therefore, not expenditure falling under section 35B of the Act. The above finding of the Income-tax Officer was confirmed by the Commissioner of Income-tax (Appeals). The assessee appealed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in our opinion, is absolutely correct in law, we find it difficult to hold that the assessee is entitled to weighted deduction under section 35B in respect of the amounts in question. As rightly held by the Tribunal, the relationship between the assessee and the West German firm, who was the recipient of the "overriding" commission, was clearly that of vendor and buyer and the payment of the overriding commission to the purchaser had the effect of reducing the sale price of the goods supplied to it by the assessee. It cannot be termed as an expenditure falling under any of the sub-clauses of clause (b) of sub-section (1) of section 35B of the Act. In that view of the matter, we do not find any infirmity in the finding of the Tribunal. We are of the clear opinion that the payment of the "overriding commission" to the purchaser was in fact a rebate or discount or reduction in the price of the goods supplied by the assessee and hence section 35B is not attracted. It may be pertinent at this stage to mention that learned counsel for the assessee laid great emphasis on the expressions "we are prepared to cede the following export business to you" and "kindly confirm that you will be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arriage of such goods to their destination outside India or on the insurance of such goods while in transit ; (iv) maintenance outside India of a branch office or agency for the promotion of the sale outside India of such goods, services or facilities ; (v) preparation and submission of tenders for the supply or provision outside India of such goods, services or facilities, and activities incidental thereto ; (vi) furnishing to a person outside India samples or technical information for the promotion of the sale of such goods, services or facilities ; (vii) travelling outside India for the promotion of the sale outside India of such goods, services or facilities, including travelling outward from, and return to, India ; (viii) performance of services outside India in connection with, or incidental to, the execution of any contract for the supply outside India of such goods, services or facilities ; (ix) such other activities for the promotion of the sale outside India of such goods, services or facilities as may be prescribed." Obviously reduction or rebate allowed on the price of the goods sold by the assessee to the purchaser in view of the quantity of goods purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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