Foreign agent commission qualifies for weighted deduction where it supports an agency outside India for overseas sales promotion.

Commission paid to foreign agents for promoting sales outside India was treated as expenditure incurred for maintaining an agency outside India within the ordinary meaning of "agency". On that basis, the payment fell within section 35B(1)(b)(iv) of the Income-tax Act, 1961, and qualified for weighted deduction. The assessee was therefore entitled to the deduction.

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Issues: Whether commission paid to foreign agents for promoting sales outside India qualifies for weighted deduction under section 35B(1)(b)(iv) of the Income-tax Act, 1961.

Analysis: The expression "agency" was treated according to its ordinary meaning, covering the function or business establishment of an agent or representative. On the facts, the assessee paid commission to foreign agents for promotion of sales abroad, and such expenditure was regarded as incurred for maintaining an agency outside India for promoting sales outside India. The provision was therefore held to cover the payment.

Conclusion: The assessee was entitled to weighted deduction under section 35B(1)(b)(iv) of the Income-tax Act, 1961.

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