1998 (3) TMI 12 - HC - Income Tax

Expenses on Agmark coupons not eligible for tax deduction; other export-related costs also excluded.

The High Court of Madras held that expenses on Agmark coupons were not eligible for weighted deduction under section 35B of the Income-tax Act, as they ... Weighted Deduction, Carriage of Export Goods High Court: MADRAS High CourtCitation: 1998 (3) TMI 12 - MADRAS High CourtJudges: N. V. BALASUBRAMANIAN, P. THANGAVELJudgment Summary:The question of law referred for the assessment years 1976-77 and 1977-78 was whether the Tribunal was justified in confirming the disallowance of expenditure incurred on Agmark coupons, fumigation charges, carriage of export goods, marine insurance, and certificate of origin under section 35B of the Income-tax Act, 1961, for the assessment year 1978-79.The court held that expenses on Agmark cannot be considered as incurred for promoting export sales or for submitting technical information to foreign buyers, thus not qualifying for weighted deduction under section 35B. This view aligns with the Andhra Pradesh High Court in CIT v. Navabharat Enterprises (P.) Ltd. (No. 2) [1988] 170 ITR 332.For fumigation charges, carriage of export goods, marine insurance, and certificate of origin, the court held these expenses fall under section 35B(1)(b)(iii) as they are for the carriage of goods in India, and thus, not eligible for weighted deduction under section 35B.The Tribunal's decision was upheld, and the question of law was answered in the affirmative and against the assessee. No order as to costs was made.