BHANSALI AND CO Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE Tribunal had made a consolidated statement of case to the Court under s. 256 (1) of the IT Act, 1961, r/w s. 18 of the Companies (Profits) Surtax Act, 1964. The assessment years involved are in 1974-75 and 1975-76. The questions arise out of the consolidated order of the Tribunal in IT Appeal Nos.1321, 1322, 1551 and 1552 (Cal.) of 1979 for which the corresponding R. A. Nos. were 849 to 852 (Cal.) of 1980.The following questions of law have been referred to this Court:--

(2.) THE facts in connection with these two questions as stated by the Tribunal are as under:-- The assessee is an exporter of tea and the relevant assessment years are 1974-75 and 1975- 76.The assessee claimed Rs. 16,14,215 and Rs. 22,83,134 as freight charges for the respective years to carry goods to destination outside India. Again, in the respective assessments sums of Rs. 1,47,192 and Rs. 70,251 being transport charges for carrying goods to docks for export outside India were claimed. The ITOs refused to allow export market development allowance under s. 35B of the Act in respect of the aforesaid two items of expenditure in both the assessments. The CIT (A) referred to certain order of the Tribunal in paragraph 9 of his order, and particularly following the Full Bench decision of the Bombay Tribunal for the asst. yr. 1973-74 in J.H. & Co. vs. Second ITO (IT Appeal Nos.3255 and 3330 of 1976-77) held that the aforesaid items would not fall for consideration under s. 35B.

(3.) AN argument was also advanced on the strength of the decision of the Court in the case of Bata India Ltd. (supra) that this Court has held that all the activities mentioned in sub-cls. (i) to (viii) are activities for promotion of sale outside India and, therefore, if it can be established that the expenditure was for promotion of sale outside India, then such expenditure will qualify for weighted deduction.