Weighted deduction under section 35B denied for export promotion contributions, subscriptions and service charges not meeting statutory conditions.

Weighted deduction under section 35B was claimed for payments described as contributions, service charges and subscriptions to export promotion councils and associations linked to export sales. The claim failed because the payments were not shown to fall within the specified expenditure categories in section 35B(1)(b) and were not established as wholly and exclusively incurred for the prescribed export promotion purposes. Applying the scope of section 35B as explained by the Supreme Court, such outgoings did not qualify for the weighted deduction.

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Issues: Whether weighted deduction under section 35B of the Income-tax Act, 1961 was allowable on payments made as contributions, service charges, and subscriptions to export promotion agencies and associations.

Analysis: The payments were made by the assessee to various bodies, including export promotion councils and associations, as contributions or subscriptions linked to export sales. The Assessing Officer held that such outgoings were not shown to have been incurred wholly and exclusively for the purposes specified in the sub-clauses of section 35B(1)(b), and therefore did not qualify for weighted deduction. The issue was considered in the light of the Supreme Court ruling on the scope of section 35B.

Conclusion: Weighted deduction was not admissible on the impugned payments; the question was answered in favour of the Revenue and against the assessee.

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