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TMI Blog1995 (4) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... e in transit ? " The assessee is a registered firm. It exported leather goods. It claimed export markets development allowance for the assessment year 1974-75 and repeated the claim for the following assessment years including the assessment year 1976-77. The Income-tax Officer declined to allow the same for the assessment year 1974-75. The assessee appealed. The Appellate Assistant Commissioner allowed the same. The Revenue preferred an appeal before the Tribunal. The Tribunal set aside the order of the Appellate Assistant Commissioner and confirmed the disallowance by the Income-tax Officer. The assessee's claim for the subsequent assessment years was, accordingly, disallowed by the Income-tax Officer. The Appellate Assistant Commissioner, however, once again permitted the allowance. The Tribunal has held in the Revenue's appeal that the assessee is not entitled to the weighted deduction in respect of the expenses incurred on the transport of goods and marine insurance. Section 35B(1)(a) of the Income-tax Act, 1961 (hereinafter referred to as "the Act") says : " Where an assessee, being a domestic company or a person (other than a company) who is resident in India, has incurre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g expenditure incurred in India in connection therewith ", is dealt with in a judgment of this court in V. D. Swami and Co. Pvt. Ltd. v. CIT [1984] 146 ITR 425, wherein it is observed (at page 428) : " As earlier mentioned, sub-clause (iii) of section 35B(1)(b) expressly excludes 'expenditure not being expenditure incurred in India in connection therewith '. To maintain that weighted deduction is available even where expenditure is incurred inside India would go against the teeth of this specific exclusionary provision. A look at the other sub-clauses of section 35B(1)(b), such for instance as sub-clauses (i), (iv), (vi), (vii), (viii) and (ix), also shows the insistence of Parliament that the weighted deduction cannot be exigible unless the expenditure under the different heads are incurred 'outside India', a phrase which occurs again and again in the various sub-clauses. To accept learned counsel's argument that the Indian situs of the export expenditure is no disqualification for eligibility for weighted deduction would be to bring in under one broad indiscriminate sweep, all expenses in an exporter's business. If that were the position, Parliament need not have troubled to ena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the goods, services or facilities in which the assessee deals or provides in the course of his business, obtaining information regarding markets outside India for such goods, services or facilities, distribution, supply or provision outside India of such goods, services or facilities, maintenance outside India of a branch, office or agency for the promotion of sale outside India of such goods, services or facilities ; preparation and submission of tenders for the supply or provision outside India of such goods, services or facilities, and activities incidental thereto ; furnishing to a person outside India samples or technical information for the promotion of sale of such goods, services or facilities ; for travelling outside India for the promotion of sale outside India of such goods, services or facilities, including travelling outward from and return to India ; 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 and such other activities for the promotion of sale outside India of such goods, services or facilities as may be prescribed, are allowable as deductio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urred in India in connection therewith " is separated by the disjunctive " or " from the second part " expenditure (wherever incurred) on the carriage of such goods to their destination outside India or on the insurance of such goods while in transit ". If the qualifying expression " not being expenditure incurred in India " is imposed on the second part " expenditure (wherever incurred) on the carriage of such goods to their destination outside India or on the insurance of such goods while in transit ", the expression "wherever incurred" shall be of no purpose and, thus will be surplusage or wastage of words by the Legislature, and shall make the expression "in connection herewith", which is found after the words " not being expenditure incurredin India " fit for all purposes. The most fitting meaning which these words appear to convey is that the expenditure incurred wholly and exclusively on distribution, supply or provision outside India of such goods, services or facilities should not be expenditure incurred in India and the expenditure on the carriage of goods to their destination outside India or on the insurance of such goods while in transit should not necessarily be one n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vehicle, or carriage of or making arrangements for carriage of passengers, livestock, mail or goods and expenditure incurred on the provision of any benefit, amenity or facility to the crew, passengers or livestock, provided it is connected with export. One of the well-recognised rules of interpretation is, where the language is plain and admits of but one meaning, the task of interpretation can hardly be said to arise. The first and foremost elementary rule of construction is that it is to be assumed that words and phrases of technical legislation are used in their technical meaning if they have acquired one and otherwise in their ordinary meaning and the second is that phrases and sentences are to be construed according to the rules of grammar. It is a corollary to the general rule of literal construction that nothing is to be added to or taken from a statute unless there are adequate grounds to justify the inference that the Legislature intended something which it omitted to express. A construction which would have without effect any part of the language of a statute will normally be rejected. The authority which is almost a phenomenon and which has been cited almost in every c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ending trade and demands of time, it is difficult to conceive that the transport cost on export of goods in India will not be available for deduction under section 35B(1)(b)(iii) of the Act. An exporter of goods manufactured in Delhi for shipment will be required to bring his goods to a sea port and must, in this process incur transport cost. A manufacturer of the same goods in the city of Bombay or in the city of Madras will hardly require any cost for transporting the goods to the sea-shore/port. The legislative intention cannot be to deny to the manufacturer in the interior of the country the competition in trade with a manufacturer in a place near a sea port. It will be so for the manufacturers or producers, who use the air cargo service. If a balanced development of the country is the desire and dream of the nation, equalisation of transport expenditure, irrespective of the distance travelled by the goods alone is the solution. We see good reasons, thus, to read in the words of the statute its intention to cover the expenditure on transport of goods for export incurred in India for the allowance under section 35B(1)b)(iii) of the Act. So far as the insurance is concerned, it i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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