HINDUSTAN FERODO LTD. Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) BY this reference, the following four questions of law have been referred by the Tribunal for the opinion of this Court under s. 256(1) of the IT Act at the instance of the assessee :

(2.) THE counsel for the parties have agreed that all the questions are covered either by a decision of this Court or of the Supreme Court and they may be decided in the light thereof. We therefore, proceed to answer the aforesaid questions as follows.

(3.) QUESTION No. 1(a) which pertains to export certification fees is covered by a decision of this Court in the case of Dr. Beck & Co. (India) Ltd. vs. CIT (1994) 120 CTR (Bom) 117 : (1994) 206 ITR 311 (Bom). In the said case the Division Bench has laid down that export inspection charges are paid at the time of export of the goods for inspection thereof by the appropriate authorities which is a condition precedent for export. It does not fall in sub -cl. (vi) of s. 35B(1)(b). That expenditure incurred on inspection of goods in India for export, commonly referred to as "export inspection charges", is undoubtedly an expenditure incurred in India in connection with the supply of goods outside India and, as such, falls in the exclusion contained in sub -cl. (iii) of cl. (b) of s. 35B(1) and hence, no weighted deduction under s. 35B is allowable on export inspection charges. Being in agreement, we answer this question in the affirmative and against the assessee.