1993 (10) TMI 77

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....t the assessee was not eligible to weighted deduction under section 35B(1) of the Income-tax Act, 1961, on Rs. 20,55,145 in respect of interest paid on post-shipment loans ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee was not entitled to weighted deduction in respect of the professional charges paid for designing for undertaking the export contract under section 35B(1)(b) Of the Income-tax Act ?" The assessee is a limited company engaged in the business of manufacture and sale of sugar, alcohol products, plastic goods, industrial machinery, etc. The relevant assessment year is 1975-76. The assessee also exports its products outside India. The export turnover....

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....ified in clause (b) thereof. Sub-clause (viii) of clause (b) reads: "(viii) performance of services outside India in connection with or incidental to, the execution of any contract for the supply outside India of such goods, services or facilities. " Thus, in order to fall under clause (viii), it must be : (i) an expenditure incurred wholly and exclusively on the performance of services outside India ; (ii) the services should be in connection with or incidental "to the execution of any contract for the supply outside India of such goods, services or facilities" which the assessee deals in or provides in the course of his business. In the instant case, the admitted position is that the interest was paid on loans obtained by the ass....