9911796707
TMI Blog1986 (7) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... that the excess payments on account of fluctuations in the exchange rate of dollars for repayment of dollar loan should have been allowed as revenue expense since the payment under consideration had been incurred as an integral part of the profit-earning process and did not bring into existence any asset or right of a permanent character ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal ought to have held alternatively that the excess payments of Rs. 6,34,484 and Rs. 42,284 was a business loss under section 28(i) ? 4. Whether, on the facts and in the circumstances of the case, the Tribunal was right in drawing a distinction between the expenditure incurred in obtaining a loan and the expenditure incurred at the time of repayment of the loan for determining the deductibility of the expenses incurred in relation to either activity ? 5. Whether, on the facts and in the circumstances of the case, the Tribunal erred in holding that the expenditure incurred for repaying the loan in foreign currency would be allowable as revenue expenditure only if the loan in foreign currency was utilised for acquiring current assets ? " On another application of the R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment year 1978-79, the Tribunal was justified in holding that the deduction under section 80J of the Income-tax Act should be allowed for the entire period instead of on a pro rata basis ? " The Tribunal has sent up a consolidated statement of case in respect of all the questions. The controversy raised in question No. 1 referred at the instance of the assessee is covered by a decision of this court in CIT v. Bharat General & Textile Industries Ltd. [1986] 157 ITR 158 as also an earlier decision of this court in Bestobell (India) Ltd. v. CIT [1979] 117 ITR 789. Following the said decisions, we answer the question in the negative and in favour of the Revenue. In view of the answer to question No. 1, we decline to answer questions Nos. 2, 3, 4 and 5 referred at the instance of the assessee. The controversy raised in question No. 1 referred at the instance of the Revenue is covered by the following decisions of this court : (a) CIT v. Kaman Devan Hills Produce Company Ltd. [1977] 119 ITR 431, (b) Indian Leaf Tobacco Development Co. Ltd. v. CIT [1982] 137 ITR 827, (c) CIT v. Alkali and Chemical Corpn. of India Ltd. [1986] 158 ITR 58, and (d) CIT v. General Marketing & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such certificate was an essential condition for the saleability of the goods in a foreign country. It was contended that the assessee was entitled to weighted deduction on account of export markets development allowance in respect of the said expenditure. The Commissioner (Appeals) accepted the contentions of the assessee and allowed weighted deduction as claimed holding that the expenditure was wholly and exclusively incurred for certification of the quality of the goods which was an essential condition of export. Being aggrieved, the Revenue went up on further appeal before the Income-tax Appellate Tribunal. The Tribunal accepted the case of the assessee that unless the said certificates were obtained from the export agency inspection authorities, it would not be possible for the assessee to export its goods. The assessee also produced before the Tribunal a Gazette of India notification dated March 6, 1965, which prohibited export of fish and its products unless accompanied by such certificate. The Tribunal also accepted the contentions of the assessee that the certificate furnished technical information for promotion of sales of the assessee's goods outside India and that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench of the Bombay High Court construing section 35B of the Income-tax Act, 1961, observed that where the Legislature desired to exclude expenditure incurred in India for the purpose of giving the benefit of weighted deduction, it expressly did so by specifically mentioning such exclusion in the sub-clause concerned, e.g., sub-clause (iii). The court observed further that where this was not done, the expenditure incurred by the assessee either outside India or in India would be eligible for weighted deduction but must fulfil the other conditions laid down in the said section. (b) CIT v. Jay Engineering Works [1984] 149 ITR 297 (Delhi). In this case, the Delhi High Court construing sub-clauses (i), (ii), (v), (vi), (vii), (viii) and (ix) of section 35B(1)(b) held that there were nothing in the said sub-clauses to indicate that in order to claim weighted deduction, the expenses must be incurred only outside India. In Bharat General & Textile Industries Ltd. v. CIT [1985] 153 ITR 747, this court construed section 35B(1)(b)(iii) and, following the decisions of other High Courts, held that clearing and forwarding charges paid by the assessee in Indian ports on goods exported, expendi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
