TaxTMI 
TaxTMI 
1995 (11) TMI 80
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....an Udyog and Associated Stones orders of the same Bench in respect of the following items : Rs. Ps. (1) Railway freight 2,32,997.45 (2) Assessment fees mudadani loading charges 23,747.78 (3) Weighment charges 243.25 (4) Godown rent 5,909.25 (5) Book charges 2,264.40 (6) Custom ship bill 120.00 (7) Bardana 3,018.47. " The assessee, Rathi Gum Industries, Jodhpur, for the assessment year 1979-80 claimed weighted deduction under section 35B of the Income-tax Act, 1961, on various items of expenses aggregating to Rs. 4,13,959.35. The Inspecting Assistant Commissioner, i.e., the assessing authority, allowed the claim of the assessee to the tune of Rs. 380 only on some of the items. Dissatisfied with the order passed by ....
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....nal refused to refer the other four questions and referred only the above question for the opinion of this court. There was a divergence of the opinion of various High Courts on the question : which expenses qualify for any deduction under section 35B of the Act ? The Central Board of Direct Taxes, therefore, issued the following guidance to the authorities subordinate to it. Instruction No. 1441, issued by the Central Board of Direct Taxes reads as under : " Instruction No. 1441-XVII/1/1993, dated 28th December, 1981:-- Deduction under section 35B.--Tribunal's decision in the case of J. Hemchand and Co. (I. T. A. Nos. 3255 and 3330/(Bom) of 1976-77 dated 7th June, 1978)--Clarification regarding-- 'Attention is drawn to the Boar....
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....urred outside India or in India, is one which is satisfied by reference to the language of the section. The court further observed that where the Legislature desired to exclude the expenditure incurred in India for the purposes of giving the benefit of weighted deduction, it expressly did so by specifically mentioning such exclusion in sub-clause (iii). 3. Then came the decision of the Special Bench of the Tribunal at Bombay in the case of J. Hemchand and Co. which laid down the following propositions of law in paragraphs 22 and 23 of its order dated 17th June, 1978. These are as under : (a) Except for the purpose of sub-clause (iii), the place where the expenditure is incurred is irrelevant and any expenditure satisfying the conditio....
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....g them as admissible for weighted deduction wholly or proportionately, may be controversial and not acceptable to the Department. In particular, its decision to allow 75 per cent. of salary of persons handling export business could still be a matter of dispute, because though accepting that the assessee's employees as part of their duty could not have avoided attending also to such work as falls within the excluded category in sub-clause (iii), it decided to apportion only 25 per cent. of the expenditure on salaries, etc., attributable to excluded activities. But for upholding 75 per cent. thereof as admissible for weighted deduction it did not at all discuss the nexus of such expenses with the purposes or activities specified in the other ....