Weighted deduction on export commission denied where payment related to sales orders, not market information outside India.

Weighted deduction under section 35B(1)(b)(ii) was confined to expenditure incurred wholly and exclusively on obtaining information about markets outside India. Commission paid to local agents of foreign buyers was treated as being connected with actual sales and procurement of export orders, not with market information, and was therefore outside the provision. The distinction between procuring orders and obtaining market information was reaffirmed, and the assessee's claim for weighted deduction on such commission was rejected.

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Issues: Whether commission paid to local agents of foreign buyers qualified for weighted deduction under section 35B(1)(b)(ii) of the Income-tax Act, 1961 as expenditure incurred wholly and exclusively on obtaining information regarding markets outside India.

Analysis: The provision applies only to expenditure incurred on obtaining information regarding markets outside India and does not extend to commission paid for actual sales or for procuring export orders. Payment to the local agent of a foreign buyer was held to be an expense directly related to the assessee's sales contract and, at best, connected with a particular purchaser abroad rather than with market information outside India. The view that procuring orders is not the same as obtaining market information was reaffirmed.

Conclusion: The assessee was not eligible for weighted deduction on the commission paid to local agents of foreign buyers; the question was answered in the negative and in favour of the Revenue.

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