TaxTMI 
TaxTMI 
1981 (6) TMI 10
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....ision, Parliament hopes to promote and develop export markets for domestic companies and other resident persons and firms in India carrying on export trade and other activities abroad. Ordinarily, in the computation of a taxpayer's business income allowances for items of expenditure cannot exceed the actual amount of expenditure. But the relief granted under s. 35B for the express purpose of promoting export markets takes the form of granting to the assessee concerned what is termed as a " weighted " allowance, that is to say, an allowance equivalent to the expenditure incurred plus one-third of that amount. Since, however, the object of the provision is not purely fiscal, but, on the contrary, to advance the policy of the State to promote ....
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....agreed with the AAC and held that the assessee was entitled to the weighted allowance under s. 35B of the Act. Section 35B of the Act refers to several items of expenditure. With reference to each one of the items of expenditure, there are conditions attached, which have to be fulfilled by an assessee before he could successfully claim the weighted allowance granted under the section. According to the Tribunal, the assessee was entitled to have the weighted allowance either under sub-cl. (ii) or under sub-cl. (iv) or under sub-cl. (viii) of s. 35B(1)(b) of the Act. In this reference, the determination of the Tribunal to this effect is challenged by the Department. It is, therefore, essential to examine whether the commission paid by t....
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....erning the export markets. Sub-clause (ii) would not therefore, apply to this case. The Tribunal was in error in thinking otherwise. Sub-clause (iv) refers to expenditure incurred wholly and exclusively on " maintenance outside India of a branch office or agency for the promotion of the sale, outside India of such goods, services or facilities ". In the present case, there is no whisper in the contentions put forward before the Tribunal and no finding by the Tribunal either that the assessee had been maintaining outside India a branch or an office or even an agency for sales promotion of prawns or shrimps. Besides, the particular payment for which the weighted allowance is asked for in the present case, viz., Rs. 14,737, is not an expend....
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....r services connected with the execution of the contract. Mr. Mani, however, attempted to put the present case within the ambit of sub-cl. (viii), taking advantage of the expression " incidental to the execution of the contract " occurring I in the said sub-clause. Learned counsel submitted that if procuring of the contract cannot be regarded as a part of the process of the execution of the contract, it can at least be regarded as a process which is " incidental " to the execution of the contract. Learned counsel's line of argument was something like this: if there is no contract, there can be no question of executing it, and for contract to be there, orders must be procured, and, therefore, procuring of orders must be held to be incident....
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....ody Export Pvt. Ltd. was paid, not outside India, but within this country. Although the assessment order does not, in terms, refer to subcl. (iii) of s. 35B(1)(b), it is easy to see that this was the sub-clause, which the ITO had in mind. The sub-clause provides that where the expenditure relates wholly and exclusively to the distribution, supply or provision outside India of goods, services or facilities, then, ordinarily, that expenditure is eligible for weighted allowance. But, that is subject to certain conditions and restrictions. One of the restrictions is that the expenditure in question must not have been incurred in India. If the expenditure for distribution, supply or provision of goods outside India is incurred in India, then the....