Weighted deduction for business foreign travel allowed where export-market exploration justified the director's overseas tour.

Depreciation on tools and implements depended on whether the assets fell within the relevant item in Appendix I of the Income-tax Rules, 1962, and the exact nature of the machines and tools required verification by the assessing authority before merits could be decided; the direction to verify the claim was therefore upheld. Weighted deduction under section 35B was allowable on a director's foreign travelling expenses because the travel was accepted as business-related in the context of an export business, and the fact that no exports were made in the countries visited did not by itself defeat the claim where the travel was directed to exploring foreign markets. The deduction was allowed.

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Issues: (i) Whether the direction to verify depreciation on tools and implements was erroneous. (ii) Whether weighted deduction was allowable on foreign travelling expenses of the director under section 35B.

Issue (i): Whether the direction to verify depreciation on tools and implements was erroneous.

Analysis: The rate of depreciation depended on whether the assets fell within the relevant item in Appendix I of the Income-tax Rules, 1962. On the material before it, the exact nature of the machines and tools could not be conclusively determined and required verification by the assessing authority before a decision on merits could be taken.

Conclusion: The direction to verify the claim was upheld and no error was found in it.

Issue (ii): Whether weighted deduction was allowable on foreign travelling expenses of the director under section 35B.

Analysis: The travelling was accepted as being for business purposes and the assessee was engaged in export business. The absence of exports in the countries visited did not by itself negate the business character of the tour, since such travel could be undertaken to explore foreign markets. On that footing, the expenditure satisfied the business-purpose requirement for weighted deduction.

Conclusion: Weighted deduction on the foreign tour expenses was allowed in favour of the assessee.

Final Conclusion: The appeal succeeded only to the extent of the weighted deduction claim, while the depreciation-related direction was left undisturbed.

Ratio Decidendi: Where foreign travel is accepted as undertaken for business purposes in an export business, weighted deduction cannot be denied merely because no exports were effected in the countries visited if the travel was for exploring foreign markets.

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