1991 (12) TMI 28

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....evant to the assessment year 1975-76, it incurred an expenditure of Rs. 1,17,959 for carriage and insurance of the goods exported. In the year of account relevant to the assessment year 1976-77, it incurred an expenditure of Rs. 10,301 for insurance and Rs. 58,375 for the carriage of the goods which were exported. The assessee, in the course of the assessment for each of the three assessment years, did not claim Weighted deduction in respect of the said expenditure under section 35B of the Income-tax Act, 1961 ("the Act" for short). Therefore, the question of allowing weighted deduction under section 35B did not arise before the Income-tax Officer. In the appeals before the Appellate Assistant Commissioner, however, the assessee pressed the....

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....n 35B(1) of the Act. Section 35B(1) provides for export markets development allowance. Clause (a) of section 35B(1) enacts that, if any expenditure (not being in the nature of capital expenditure or personal expenses of the assessee) referred to in clause (b) has been incurred by an assessee, he shall, subject to the provisions of this section, be allowed a deduction of a sum equal to one and one-third times the amount of such expenditure incurred during the previous year. Clause (b)(iii) of section 35B(1) reads as follows : " (b) The expenditure referred to in clause (a) is that incurred wholly and exclusively on - . . . (iii) distribution, supply or provision outside India of such goods, services or facilities, not being expenditure....

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.... of such goods while in transit'. The presence of a comma after the word 'facilities' and the omission of comma after the words ` connection therewith' and the presence of the word `or' before the words `expenditure (wherever incurred)' supports this construction. Further, a reference to clause (a) of section 35B(1) will show a similar style of drafting in the words `not being in the nature of capital expenditure or personal expenses of the assessee'. These words clearly mean not being in the nature of capital expenditure or not being in the nature of personal expenses of the assessee. Similar interpretation is to be adopted of the words `not being' occurring in the second part of clause (b)(iii). In our opinion, expenditure on the carriage....