2004 (9) TMI 35

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....ted deduction under section 35B may be allowed to the assessee in respect of the sum of Rs. 6,99,489 incurred under the head export consultancy charges?" Section 35B of the Income-tax Act, 1961, relates to export market development allowances and by virtue of the provisions of this section, inter alia, any expenditure referred to in clause (b) of section 35B(1) is to be allowed as a deduction to the extent of the sum equal to one and one-third times of the amount of such expenditure incurred during the previous year. Clause (b) of sub-section (1) of section 35B details the expenditure referred to for which a deduction can be claimed. We are concerned with sub-clause (ix) which reads as under: "(ix) such other activities for the promot....

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....d on a pre-investment survey could be allowed as a deduction, one of the two conditions specified in the proviso needs to be fulfilled. A request in writing must have been made either by the Central Government or by a foreign party to whom such goods, services or facilities were likely to be sold or provided by the assessee. In this case, admittedly, there is no request in writing made by the Central Government and there is no evidence of any such written request on behalf of the foreign party either. In fact, we find that this aspect of the matter has not been discussed by the Tribunal at all. These conditions have to be fulfilled before the deduction is allowed and in this view of the matter, we feel that the matter ought to be remanded t....

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....been allowed for the same assessment year in case of Junach (P) Ltd. by us and the said decision has been accepted by the Revenue. With regard to other two claims we are satisfied that these are covered by the provisions of section 35B. The commission to the foreign agents have been paid for multifarious activities. The payment on quality control is covered by rule 6AA. We, therefore, direct that weighted deduction under section 35B be allowed on the said three items of expenditure." It thus appears that the Tribunal in this matter followed its decision in the case of Junach (P) Ltd., the reference (Income Tax Reference No. 5 of 1995) in respect of which has already been disposed of by us hereinabove. It must, however, be noted that in t....