KAMAL SILK EMPORIUM Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) AT the instance of the assessee, the Income-tax Appellate Tribunal, New Delhi (for short the Tribunal), has referred under S. 256(1) of the IT Act, 1961 (for short the Act), the following question for our opinion :

(2.) BRIEFLY stated, the background facts leading to the present reference are that the assessee, an individual, carries on business of purchase and sale of silk articles. During the asst. yr. 1977-78, for which the relevant previous year ended 31st March, 1977, the assessee claimed before the ITO weighted deduction under S. 35B of the Act on the expenses amounting to Rs. 1,85,620, on the plea that these expenses were incurred on earning foreign exchange by selling goods to the foreign tourists. The ITO, however, found that in the case of the assessee there was no expenditure either on the sale of the goods outside India or promotion of such sales outside India and hence the question of deduction under S. 35B of the Act did not arise. He, accordingly, rejected the claim made by the assessee under the said section.

(3.) NO one appears for the assessee. We have accordingly Mr. R.D. Jolly, learned senior standing counsel for the Revenue.