1980 (2) TMI 146

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.... Before the ITO the assessee claimed weighted deduction in respect of the four items stated above and also on export staff remuneration. The AAC allowed the four items mentioned and hence the present appeal by the Department. 3. Commission paid to State Trading Corporation of Rs. 2,42,670: The main objection of the Department is that these are all expenses incurred by the assessee within India and export market development allowance under s. 35-B is admissible only for expenses incurred outside India. Various Benches of the Madras Tribunal as well as the Bombay Tribunal had held that there is no question of s. 35-B deduction being limited only to expenses incurred outside India. Even expenses incurred within Indian if it conformed to ....

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....entiality for skins in foreign countries, i.e., the markets outside India for the goods of the assessee and the State Trading Corporation is having branch offices in various foreign countries and the assessee can utilise their services whenever required. Since the exports to foreign market can be made only through the State Trading Corporation the commission paid to the State Trading Corporation is entitled to weighted deduction. Services rendered by the State Trading Corporation come under sub-s. (i), (ii), (iv) and (vi). As such the AAC was justified in granting weighted deduction in respect of the commission paid to the State Trading Corporation. 5. Commission paid to local agents of foreign buyers of Rs. 1,85,910: Here also the ob....

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....tal representative that there had been outright sales to the agents. But no evidence is brought to our notice to substantiate that. 7. The commission paid to local agents are for services rendered which fall under ss. 35B(1)(b)(i) and (vi). In as much as the commission payments in question fall under sub-cl. (I)(b)(i) and (vi) the AAC is justified in allowing weighted deduction on these items. 8. Interest payment to bankers: Here also the main objection of the Department seems to be that the expenses are incurred within India and not outside India. This contention cannot be upheld. As soon as the documents are negotiated through bank, the assessee is allowed to draw 100 per cent of the invoice value. The bank applies the exchange rate....