Weighted deduction for foreign sales commission denied where no overseas promotional office or qualifying export-development was proved.

Commission paid to outside agents abroad for procuring sales did not qualify for weighted deduction under section 35B(1)(b)(iv) unless the assessee could show expenditure on maintaining or financing an overseas office or other promotional activity contemplated by the provision. Mere payment of sales commission, without material proving that the assessee incurred such marketing or export-development expenditure, was insufficient. The earlier authority relied on by the assessee was inapplicable because it concerned cases where part of the foreign agent's office expenses had actually been met.

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Issues: Whether commission paid to outside agents abroad on sales procured through them qualified for weighted deduction under section 35B(1)(b)(iv) of the Income-tax Act, 1961.

Analysis: The allowance under section 35B requires expenditure incurred for promotion of marketing or export development in the manner contemplated by the provision. A mere payment of commission on sales effected, without material to show that the assessee maintained or financed an office of the agent abroad for promotional activity, does not amount to expenditure on promotion of marketing. The earlier decision distinguishing cases where part of the agent's abroad office expenses were actually met was held inapplicable on the facts.

Conclusion: The commission paid to outside agents abroad was not eligible for weighted deduction under section 35B(1)(b)(iv), and the answer was against the assessee and in favour of the Revenue.

Ratio Decidendi: Mere commission paid to a foreign agent for procuring sales, without proof that the assessee incurred expenditure on maintaining an overseas office or on promotional activity contemplated by section 35B(1)(b)(iv), does not qualify for weighted deduction.

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