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TMI Blog1990 (11) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... export the goods or be an exporter and, in that view, remitting the matter to the Income-tax Officer for further enquiry ?" Shortly stated, the facts are that Messrs. Project and Equipment Corporation of India Ltd. (hereinafter referred to as "PEC") obtained a contract from a Dubai party for supply of distribution materials in kind of electrical equipment and, on its part, entered into a contract with the assessee-company for supply of these distribution materials to it. Under this contract, PEC was entitled to certain commission. For the assessment year under consideration, the assessee claimed weighted deduction under section 35B of the Act on the commission of Rs. 6,87,575 paid to PEC. The Income-tax Officer, however, disallowed the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er made such enquiry nor the "assessee produced any evidence in support of his claim under sub-clauses (i) and (ii) thereof during the assessment proceedings," the Tribunal remitted the matter to the Income-tax Officer for such enquiry during which the assessee was to lead evidence to show that the conditions enumerated in subclauses (i) and (ii) of section 35B(1)(b) of the Act had been fulfilled by it. Before us, the contentions raised before the Tribunal have been reiterated. The short question which calls for determination is whether weighted deduction under section 35B is available with reference not only to the qualifying expenditure incurred directly by the assessee but also with reference to such expenditure incurred indirectly b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to lay down any general rule in this regard which would be applicable in all situations, it may be stated that individual members or constituents of an association or body, which undertakes export markets development or agricultural development on behalf of or for the benefit of its members, will qualify for the weighted deduction under section 35B or 35C with reference to their share in the expenditure incurred by the association or body, provided : (a) the expenditure falls under one or more of the several qualifying categories specified in the respective sections and the rules, if any, framed thereunder; (b) where the expenditure incurred by the association or body includes any expenditure on activities other than those which fall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ales took place beyond the territorial jurisdiction of this country. Therefore, in such a case, the real exporter is the assessee company who, through the Project and Equipment Corporation of India Limited, exported the goods. We are, therefore, of the opinion that if the assessee fulfils the other requirements of the provisions of section 35B, it will be certainly entitled to claim weighted deduction under section 35B in respect of the goods and products manufactured and exported by the assessee on which the assessee claimed to have incurred certain expenditure. In our view, therefore, the Tribunal was justified in holding that the weighted deduction cannot be denied to the assessee simply on the ground that the assessee has not exported t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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