COMMISSIONER OF INCOME TAX Vs. ASIATIC SEA FOODS

JUDGEMENT

(1.) THE question of law referred in this case by the Income-tax Appellate Tribunal, Cochin Bench, is :

(2.) THE assessee is a registered firm engaged in the business of exporting marine products. During the accounting year relevant to the assessment year 1970-71, the assessee had incurred an expenditure of Rs. 2,76,182 towards storage, handling, etc., outside India. THE claim of the assessee for export markets development allowance under Section 35B of the Income-tax Act on this expenditure was disallowed by the Income-tax Officer, but allowed by the Appellate Assistant Commissioner. THE expenditure was bifurcated as involving Rs. 80,364 towards carriage of goods and the rest towards storage. THE Income-tax Appellate Tribunal found the expenditure of Rs. 80,364 as one not falling within Sub-clause (iii) of Section 35B(1)(b) of the Act and restored the disallowance to that extent. In respect of the balance Rs. 1,95,818, the Tribunal held the view that the expenditure has been incurred after the goods have been brought to their destination for sale and so the assessee is entitled to a deduction under Section 35B of the Act. This finding of the Tribunal is attacked by the Revenue on two grounds.

(3.) THEREFORE, the question referred to us is answered in the affirmative, viz., against the Revenue and in favour of the assessee. There shall be no order as to costs.