COMMISSIONER OF INCOME TAX Vs. TUNGABHADRA INDUSTRIES LTD

JUDGEMENT

(1.) In this reference under Section 256(1) of the Income-tax Act, 1961, for the assessment year 1976-77, the following question of law has been referred to this court :

(2.) The assessee claimed export markets development allowance in respect of expenditure of Rs. 8,16,274. According to the Income-tax Officer, these expenses included shipping expenses, bank commission, administrative expenses, salary, postage, etc. He held that except the expenditure of Rs. 1,30,500 incurred on account of foreign travelling, the assessee was not entitled to the allowance under Section 35B.

(3.) Against the Income-tax Officer's decision, the assessee preferred an appeal to the Commissioner of Income-tax (Appeals). Following the Special Bench order of the Tribunal on this issue, he held :