9911796707
TMI Blog1991 (12) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... ight difference 35,320 49,652 8,150 - 2. Quality allowance 1,16,594 63,993 7,11,492 9,47,040 3. Dalali 11,400 15,137 - - 4. Quota slips - 1,90,492 9,010 1,05,190 5. Analysis charges - 9,633 7,316 7,175 6. Port godown rent - - 17,895 - 7. Kharajat expenses - - 9,50,135 - ------------------------------------------------------------------- In the assessment for the assessment year 1972-73, the Income-tax Officer rejected the assessee's claim for weighted deduction in respect of the items set out above mainly on the ground that the expenditure was incurred in India and was not eligible to weighted deduction. For the assessment year 1973-74, the Income-tax Officer rejected the claim of the assessee for weighted deduction on the ground firstly that the expenditure which was incurred by the assessee was in its ordinary course of business and as such did not fall for consideration under section 35B of the Act. He also held that the expenditure incurred for the payment on dalali, de-oiled cake, quota sl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was entitled to weighted deduction to the extent of 10 per cent. of the said expenses. In reaching this conclusion, the Tribunal followed the decision of a Special Bench. In the background of the above facts, the following question is referred to us for our opinion : Whether, on the facts and in the circumstances of the case, the assessee is entitled to weighted deduction under section 35B of the Incometax Act, 1961, in respect of: Rs. Assessment year 1972-73 : 1. Weight difference 35,320 2. Quality allowance 1,16,594 Assessment year 1973-74 : 1. Quality allowance 63,993 2. Quota slips 1,90,492 3. Weight difference 49,652 4. Analysis charges 9,633 Assessment year 1974-75 : 1. Quality allowance 9,47,040 2. Quota slips 1,05,190 3. Analysis charges 7,175 Assessment year 1975-76 : 1. Quality allowance 7,11,492 2. Quota slips 9,010 3. Weight difference 8,150 4. Analysis charges 79,316 5. Godown rent 17,895 6. Kharajat expenses 9,50,135 Mr. K. H. Kaji, learned counsel for the assessee at whose instance, the above question has been referred to us for our opinion, submitted that the assessee is entitled to weighted deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dealing. Quota rights for making exports were purchased from other parties and, for that purpose, the assessee had incurred expenditure. In other words, it had incurred expenditure for payment of price of the quota rights which are described as quota slips. Admittedly, this expenditure in purchasing the quota slips was incurred in India. Since the expenditure was incurred in India, it would not qualify for weighted deduction under the aforesaid sub-clause (iii) of section 35B(1)(b) of the Act. So far as the godown rent is concerned, it appears that the assessee had incurred expenditure in payment of rent for the godown where goods which were exported were stored. This expenditure was also, admittedly, incurred in India. Therefore, as in the case of expenditure incurred for quota slips, the assessee is not entitled to claim weighted deduction in respect of the expenditure incurred for godown rent. We, therefore, confirm the view taken by the Tribunal in disallowing the assessee's claim for weighted deduction in respect of weight difference, quality allowance, quota slips and godown rent. So far as kharajat expenses are concerned, it is stated that they represented port charges for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alysis was to be made. It was urged on behalf of the assessee before the Tribunal that the goods exported were analysed to determine their quality and the entire expenditure for analysis in respect of which weighted deduction was claimed was incurred outside India. The Tribunal did not reject the assessee's claim on the ground that the expenditure was incurred in India. The Tribunal was of the view that expenditure incurred by the assessee for quality certificate on the basis of analysis was comparable with " AG Mark " certificate charges which were disallowed by the decision of a Special Bench of the Tribunal. Following the decision of the Special Bench, the Tribunal held that the assessee was not entitled to claim weighted deduction in respect of the charges for analysis. In our opinion, the entire approach of the Tribunal is not correct. Analysis of the goods exported, i.e., de-oiled cakes, was directly connected with the supply of the said goods. The assessee was required to supply de-oiled cakes of certain quality and it was in order to satisfy the customers that the de-oiled cakes were of specified quality, it was required to get the de-oiled cakes analysed. The assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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