JAI BHARAT ENTERPRISES Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) In these four petitions presented by M/s. Jai Bharat Enterprises, Bangalore, under Section 266(2) of the Income Tax Act, 1961 (tor short the Act), the following question of law arises for consideration : "Whether an application for reference under Section 256(2) of the Act lies in respect of an order made by the Appellate Tribunal rejecting an application made before it under sub-sec. (2) of Section 254 of the Act ?

(2.) The facts of the case, in brief are as follow : For the assessment years 1977-78 to 1880-81 the assessee claimed relief under Section 35B (1)(b) of the Act in respect of certain expenses incurred. The Income-tax Officer held that the assessee was not entitled to weighted deduction since it had sold all goods to M M.T.C. which in turn exported the goods. It was further held that as all the expenses, which fell under sub-clause (iii) of Sec. 35B (1)(b) of the Act, were incurred in India, the assessee was not entitled the weighted deduction.

(3.) On appeal, for the assessment year 1977-78, the Commissioner of Income-tax (appeals) held that the petitioner was entitled to weighted deduction on 50% of the rent payment and the expenses on the Supervision on foreign ports. As regards the other items he held that the assessee was not entitled to weighted deduction. Regarding the assessment year 1978-79 in addition to the aforesaid deduction, Commissioner of Income-tax (Appeals), directed the Income-tax Officer to consider whether weighted deduction at 75% of the total salary paid by the assessee, 50% of the assessee's expenditure on printing and stationary, 50% of the rent payment to Sanvordem and Mangalore Office should be allowed. Similar orders were passed for the assessment years 197980 and 1980-81. Aggrieved by the orders of the Commissioner of Income-Tax (Appeals), the assessee filed appeals before the Income-Tax Appellate Tribunal in which the assessee urged the following grounds: