Weighted deduction under section 35C denied for distillation, transport, research-centre expenses and related depreciation claims.

Weighted deduction under section 35C was denied for expenditure on distillation services, transportation services to farmers, Mentha Research Centre, Mentha Research Administrative Centre and Mentha Administration Services, together with depreciation on assets used for distillation and research activities. The HC followed earlier reference decisions involving the same assessee and similar facts, and held that these items did not fall within the deduction provision. The assessee's claim was therefore rejected, and the questions were answered against the assessee.

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Issues: Whether the assessee was entitled to weighted deduction under section 35C of the Income-tax Act, 1961 in respect of expenses incurred on distillation services, transportation services provided to farmers, Mentha Research Centre and Mentha Research Administrative Centre including Mentha Administration Services, and depreciation on assets used for distillation services and the Mentha Research Centre.

Analysis: The questions were answered by following earlier reference decisions involving the same assessee and similar facts. The claims relating to the various categories of expenditure and depreciation were held not to qualify for the weighted deduction sought under section 35C.

Conclusion: The assessee's claim for weighted deduction was rejected and the questions were answered in the affirmative and against the assessee.

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