RAJAN TRADING CO Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN pursuance of the directions given by this court in T.C.P. Nos. 198 and 199 of 1980 dated November 3, 1980, the Tribunal referred the following questions for our opinion :

(2.) THE references relate to the assessment years 1976-77 and 1977-78 relevant to the accounting years ending on July 31, 1975, and July 31, 1976, respectively. THE assessee-firm derives income from the export of engineering goods. For the assessment year 1976-77, the assessee claimed relief under section 35B of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), on three items, viz., printing and stationery, telephone charges and salaries. THE claim was made up to 75 per cent. of the first item and 50 per cent. of the last two items. THE total amount of each claim so made came to Rs. 22,786 and the additional deduction claimed was Rs. 7,595. THE Income-tax Officer disallowed the entire claim on the ground that all these expenses had been incurred in India.

(3.) WE have heard the rival submissions.