ENGINE VALVES LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE assessee had changed its previous year for the assessment year 1980-81, from 31st March to 30th September, 1979. THE income considered for assessment for that year was for a period of 18 months. THE assessee's claim that the specification of the sum of Rs. 72,000 under Section 40(c) of the Act be increased by 50 per cent., on the ground that the limit specified in that Section was normally meant to apply only to cases where the previous year did not exceed 12 months, was rejected uniformly by the Assessing Officer, the appellate authority and the Tribunal. THE first question referred to us at the instance of the assessee is regarding the correctness of that holding of the Tribunal.

(2.) THE language of Section 40(c) is clear. It, inter alia, provides that the deduction in respect of the aggregate of the expenditure and allowance referred to in that Section in respect of any one person referred to in Sub-clause (i) shall, in no case, exceed Rs. 72,000.

(3.) THE second question1, therefore, is answered partly in favour of the Revenue with regard to the expenditure incurred on the visit of the Yogoslavian delegation and partly in favour of the assessee, viz., the expenditure incurred by the assessee on the export inspection fee, which expenditure shall be entitled to weighted deduction under Section 35B.