CIT Vs. SARAF TEXTILE MILLS

JUDGEMENT

(1.) The Tribunal, Jaipur Bench, Jaipur has referred the following question of law for our answer pursuant to RA No. 335/Jp/1988 arising out of ITA No. 971/Jp/1983 for the assessment year 1976-77:

(2.) The brief facts relating to the case are that the assessee claimed weighted deduction under Section 35B of Income Tax Act in respect of various expenses incurred by it. The assessing authority held that following expenses did not qualify for the deduction under Section 35B:

(3.) On an appeal by the assessee the Commissioner (Appeals) reversed the order of the assessing authority and directed to allow the weighted deduction on all the four abovenoted amounts. Aggrieved by the order passed by the Tribunal (sic-- authority) the appellant filed an appeal before the Tribunal. The Tribunal relying on a judgment in the case of Associated Stone Industries in ITA Nos. 1027/Jp/1981 and 1028/Jp/1981 held that the air freight and transport freight qualify for weighted deduction. The assessees claim of weighted deduction on insurance and interest to bank was also accepted following the judgment in the case V.H. Jewellers v. Asstt CIT,2001 71 TTJ 184 (Jp-Trib) . Aggrieved by the order of the Tribunal, revenue prayed for reference of the question quoted above, which is then referred to this Court.