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TMI Blog1992 (11) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of expenses incurred on delegation, export promotion, compliments, etc. ? (Question of 1980-81) 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in confirming the order of the Commissioner of Income-tax (Appeals) who held that the assessee is entitled to weighted deduction under section 35B in respect of delegation expenses of Rs. 3,03,954 and the expenditure on complimentary articles given to foreign delegates amounting to Rs. 32,280 ?" (Question of 1981-82) Though the questions are differently worded, there is no dispute that the answer in I. T. R. C. No. 75 of 1991 would govern the question referred in I. T. R. C. No. 20 of 1991 also. The assessee is engaged in export of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce referred to as any expenditure referred to in clause (b). Sub-clause (ii) of this clause (b) would read thus : the expenditure incurred wholly and exclusively on obtaining information regarding markets outside India for such goods, services or facilities. We may also refer to clause (i) which refers to the expenditure incurred wholly and exclusively on 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. According to the assessee, the delegates from foreign countries are received and entertained so that the assessee could obtain proper information regarding the markets outside India for the goods marketed by the assessee. The f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eighted 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 enact so many clauses in section 35B. The section would have been simpler and been enacted differently." While comparing sub-clause (iii) with the other sub-clauses, the Madras High Court in fact has not referred to sub-clause (ii) at all. It has referred only to such of the sub-clauses which involved expenditure outside India, In fact, the reasoning of the Madras High Court would support the contention of the assessee because if the expenditure incurred in India were to be outside the scope of the weighted deduction under sub-clause (ii), Parliament certainly w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss. The expenditure was incurred in regard to the performance of services outside India, i.e., in East Africa and the United Kingdom, in connection with the execution of a contract for the supply of tea in the United Kingdom. The provision does not require that the export should be from India. The provision, read plainly, entitles the assessee to the deduction thereunder. " Mr. Raghavendra Rao strongly relied on the decision of this court in Chief CIT v. Mysore Sales International Ltd. [1992] 195 ITR 457. It was a case wherein certain commission paid to a foreign agent was sought to be brought within sub-clause (vi) of clause (b). Since the assessee had not maintained any agency outside India, it was held that the said sub-clause was not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... connection with a conference in India for promotion of exports was the subject-matter of a claim under section 35B. The High Court had affirmed the order of the Tribunal which directed the Appellate Assistant Commissioner to decide whether the expenses claimed by the assessee were incurred for the purpose of export promotion. At page 672, the Bench observed thus : "All the purposes mentioned in sub-clauses (i) to (viii) are activities for the promotion of the sale outside India. The language employed in sub-clause (ix) 'such other activities for the promotion of the sale outside India. . . .' clearly implies that the activities mentioned in sub-clauses (i) to (viii) are also activities for the purpose of promotion of sale outside India. I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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