9911796707
TMI Blog1982 (6) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... egram, telephones and other general expenses. Another company, M/s. Eldee Wire Ropes Ltd. (hereinafter " Eldee "), had been exporting various types of wire ropes and had in that behalf and, during a period, incurred an expenditure of Rs. 1,31,560 which included, inter alia, BPT certificate charges and cartage and coolie charges. For their previous year ending 31st March, 1971 (assessment year 1971-72), Eldee claimed weighted deduction of Rs. 43,853 under s. 35B of the I.T. Act, 1961 (hereinafter " the Act "). The ITO disallowed the said claim. The AAC allowed Eldee's appeal therefrom, holding that the items for which weighted deduction was claimed were admissible under s. 35B of the Act. The correctness of this decision was challenged by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioning such exclusion in the sub-clause, for example, sub-clause (iii). It must follow that where this was not done, the expenditure can be incurred by the assessee either outside India or in India, but it must pertain to the purposes mentioned in the various sub-sections, which purposes are indicated as pertaining to the, various activities outside India. If then an assessee, under this clause, claims the benefit of weighted deduction, he will have to satisfy the revenue authorities that the purpose is one which is satisfied by reference to the language of the section; and in such a case where the assessee is able to discharge this burden, he would be entitled to a weighted deduction irrespective of whether the expenditure is incurred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the one taken by the High Court. Though the High Court ruling benefits the assessee, yet, and notwithstanding the same, the authorities under the I.T. Act, apprehends the learned counsel, will now, to the detriment of the assessee, uniformly follow and apply the Special Bench ruling. Mr. P. M. Pradhan, learned counsel for the Revenue, submits that there is no cause for such apprehension. According to him, the High Court ruling will still be considered by the Department and proceedings would still be decided in the light thereof. Considering the rival contentions and the two rulings in question, find that the ruling of the Special Bench has given rise to a rather disturbing situation. While seeking to settle the controversy arising ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling. The petitioner's apprehension accordingly cannot be said to be unwarranted. Indeed, paragraph seventeen of the affidavit in reply categorically states that the authorities "...are bound to follow the decision of the Special Bench ". In this context, therefore, it becomes necessary to direct the Department to decide the petitioners' assessment proceedings by considering all aspects, including not only the Special Bench ruling but also the High Court ruling, and without feeling bound by the Special Bench ruling on questions covered by the High Court ruling. Indeed, on such latter questions, the High Court ruling would continue to bind all tax authorities in the State of Maharashtra. It is well to remember that the rule of law and legal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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