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TMI Blog1989 (5) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... revious year and in holding that the assessee was not entitled to the deduction of the same in computing the total income for the assessment year 1978-79 ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right under the law in holding that certifying charges and inspection fees will not qualify for appropriate weighted deduction under clause (v) of section 35 B (1) (b) ?" The respondent is the Revenue. We are concerned with the assessment year 1978-79. The assessee is a firm. It is engaged in export of tea. For the accounting period ended on March 31, 1978, the assessee claimed an amount of Rs. 9,36,198 by way of deduction. According to the assessee, this sum represented interest that has accrued to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y way of deduction. The Commissioner of Income-tax (Appeals) held that the assessee would be entitled to the interest that had accrued up to the last day of the previous year only. In further appeal, the Appellate Tribunal affirmed the orders passed by the authorities below. The Appellate Tribunal found that the liability of the assessee to pay interest depended upon the time taken for the bills to be cleared, that the exact delay for each bill could not be anticipated, that the quantum of interest depended upon the period of delay and in the absence of any definiteness regarding the period of delay, there was no certain liability to pay interest or any definite amount quantified by way of interest and in this view, the liability to pay int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 9,36,198 paid by way of interest should be allowed by way of deduction. The plea was that the liability to pay such interest arose or accrued even at the time when the bills were discounted. There is no force in this plea. It is common ground that the documents of sale were discounted by the assessee through the local banks. The assessee discounted the documents of sale under an arrangement known as "foreign documentary bills purchased". Under the said arrangement, normal rates are levied up to 60 days from the date of presentation. It is for the delay beyond 60 days that penal rates of interest were levied and collected by the clearing bank in India. The interest payable for each bill could be ascertained and fixed or determined only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for the supply or provision outside India of such goods, services or facilities, and activities incidental thereto..." The expenditure should have been incurred wholly and exclusively by the assessee for preparation and submission of tenders and activities incidental thereto. The preparation or submission of tenders should be for the supply or provision outside India of such goods, services or facilities which was dealt with by the assessee or provided by him in the course of his business. The Commissioner of Income-tax (Appeals) found that a sum of Rs. 19,233 was paid for obtaining a certificate of fitness and the assessee was not able to substantiate that the said claim will come within section 35B(1)(b) of the Act. The Income-tax Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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