COMMISSIONER OF INCOME TAX Vs. MEENAKSHI AND COMPANY

JUDGEMENT

(1.) AT the instance of the Revenue, the following two questions of law have been referred for the assessment year 1977-78 in respect of the assessee, Meenakshi and Co., Dindigul.

(2.) THE assessee is a registered firm and during the course of the assessment proceedings for 1977-78, the assessee claimed export markets development allowance under Section 35B of the Act. THE order of assessment shows that the assessee in support of its claim has produced the items of expenditure, but the Income-tax Officer on the ground that none of the items of expenditure satisfied the conditions stipulated in Section 35Bof the Act, disallowed the entire claim. When the matter came up before the Commissioner of Income-tax (Appeals)-II, he followed an order of the Full Bench of the Income-tax Appellate Tribunal, Bombay, in the case of J. H. and Company and allowed the weighted deduction in respect of commission and brokerage on exported skin, premium to Export Credit Guarantee Corporation and commission to the State Trading Corporation. On appeal by the Revenue before the Appellate Tribunal, the Appellate Tribunal also followed the Full Bench order of the Income-tax Appellate Tribunal, Bombay, and held that the Commissioner of Income-tax (Appeals) was justified in allowing the item of weighted deduction. It is against the order of the Appellate Tribunal, the Revenue has sought for a reference and the two questions of law stated earlier have been referred to us.