TaxTMI 
TaxTMI 
2009 (1) TMI 242
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....e's claim for weighted deduction under section 35B of the Income-tax Act on the expenditure headed 'advertisement and publicity in newspapers and magazines in India'?" 2. This question has been raised in respect of three assessment years, viz., 1976-77, 1978-79 and 1979-80. "2. Whether, on the facts and in the circumstances of this case, fees paid for certificates or origin and legalisation of export documents and stamp fees were not allowable under weighted deduction under section 35B of the Act ?" 3. This question has been referred in respect of the assessment years 1977-78, 1978-79 and 1979-80. "3. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in disallowing weighted deduction....
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....ellate Tribunal was right in rejecting the assessee's claim for the deduction of the surtax liability ?" 8. This issue was raised in respect of the assessment year 1976-77 only. 9. After hearing both the sides and perusing the record, we answer the questions referred as under. (a) As regards question No.1, we note that it is an admitted position that the expenditure was incurred on advertisements and publicity in newspapers and magazines in India, that the company was in the business of sale of steel pipes in India and abroad and out of the gross sales only 43.17% were export sales. Counsel appearing for the assessee submitted that the Indian newspapers and magazines in which the advertisements were given, also had a foreign circulation ....
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....35B which purposes pertain to various activities outside India. In our view, however, in the facts of the present case, the weighted deduction cannot be allowed for an entirely different reason. According to the assessee, the said deduction is claimable as the expenditure is one which is covered by section 35B(1)(b)(i). The relevant portion of section 35B(1)(b)(i) reads as under. "35B.(1)(b) The expenditure referred to in clause (a) is that incurred wholly and exclusively on- (i) advertisement or publicity outside India in respect of the goods, services or facilities which the assessee deals in or provides in the course of his business where such expenditure is incurred before the 1st day of April, 1978) . . . (bracketed portion inserted ....
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.... cited judgments and on the aforesaid reasons, we answer the question in the affirmative and against the assessee. (c) As regards question No. 3, counsel appearing for both the sides agree that the question has already been answered in favour of the Revenue by the judgment of this court in the case Forbes Forbes Campbell and Co. Ltd. v. CIT reported in [1994] 206 ITR 495. In the said case, this court has held that export inspection charges, brokerage, insurance, bank charges and clearing charges are not entitled to weighted deduction in view of specific exclusion made in sub-clause (iii) of section 35B(1)(b) of the Income-tax Act, 1961. Following the said ruling, this question is answered in the affirmative and in favour of the Revenue. (....
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.... such a business expenditure in proportion to the export related activities and then say that a proportion thereof is incurred wholly and exclusively for activities for the promotion of sale of goods or performance of services outside India. The question in so far as this aspect is concerned is, therefore, answered in the affirmative and in favour of the Revenue. (e) As regards question No. 5, counsel for the parties are in agreement that the question has already been answered in the affirmative and in favour of the Revenue by the judgment of the apex court in the case of Brooke Bond India Ltd. v. CIT [1997] 225 ITR 798 and in the case of Punjab State Industrial Development Corporation Ltd. v. CIT reported in [1997] 225 ITR 792 (SC). In th....