TaxTMI 
TaxTMI 
1988 (8) TMI 128
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....t for the asst. yr. 1978-79 was taken and completed along with assessments for the two subsequent assessment years i.e. asst. yrs. 1979-80 and 1980-81. The ITO, in all the three years, allowed certain reliefs under s. 35B of the Act as per orders dt. 14th May, 1982. Thereafter, on 22nd April, 1985, the successor ITO was of the opinion that relief allowed to the assessee in respect of expenditure on "blending of tea", "packages for export of goods" as also "bank interest" did not fall under cl. (viii) of s. 35B(1)(b) of the Act, as these expenditures were incurred in India and, therefore, relief under s. 35B was wrongly allowed to the assessee. As per the successor ITO, the assessment for 1978-79 was to be completed in compliance with direct....
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....Sept., 1981. Bank interest on deferred payment was allowed after full discussion and on basis of decision of Tribunal in Tribunal No. 291 of 1970 dt. 26th May, 1980. Likewise, relief in respect of blending charges and expenses incurred on package material was allowed by the ITO after applying his mind. He further observed that orders for the asst. yrs. 1979-80 and 1980-81, were passed after directions under s. 144B of the Act were issued by the IAC. That apart, as per CIT(A) the points involved were arguable and, therefore, rectification, withdrawing relief under s. 35B of the Act already allowed to the assessee, was not a mistake apparent from record. On the issue involved, two opinions were possible. The CIT(A), accordingly, cancelled rec....
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....r s. 35B of the Act were fully competent. 5. Shri R.N. Bajoria, learned counsel for the assessee maintained that as far as asst. yrs. 1979-80 and 1980-81 were concerned there was no direction of CIT(A) to apply decision of J. Hemchand & Co. and, therefore, relief under s. 35B was to be allowed in accordance with principle of law. He, therefore, pointed out that facts as far as two subsequent assessment years were concerned, were different and, therefore, the submission that in not applying principle of J. Hemchand & Co. the ITO, committed rectifiable mistake under s. 154 of the Act was not tenable in these two years. For the asst. yr. 1978-79, CIT(A), as per his order dt. 23rd Sept., 1981, had set aside whole assessment with direction to....
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....25 (Cal) of 1984 in case of CIT vs. Kanoria Chemical and Industries Ltd.) wherein Tribunal on similar circumstances upheld the order of CIT(A), cancelling rectification order under s. 154 withdrawing relief allowed to the assessee under s. 35B of the Act. The reference application under s. 256(1) against the above order was dismissed by the Tribunal and said order has been maintained by Hon'ble High Court under s. 256(2) of the Act as per decision dt. 19th July, 1988, in reference Matter No. 1874 of 1986. It was accordingly argued that orders of CIT(A) be affirmed. 6. We have carefully considered rival contentions of the parties as also facts, material on record and case-laws cited at the bar. As per order dt. 23rd Sept., 1981 in asst. y....
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.... he was directed to do. The successor ITO, in orders dt. 21st July, 1985, has on reading of Special Bench decision held that relief under s. 35B(1)(b)(viii) was wrongly allowed as expenditure were incurred in India. After observing "whether a particular claim raised by an assessee falls under one or more of the activities specified in those sub-clauses can best be judged only with reference to the facts of particular case and the nature of claim made", the Special Bench of J.H. & Co. had also concluded as under: "(vi) Except for the purpose of sub-cl. (iii), the place where the expenditure is incurred is irrelevant. In other words, any expenditure satisfying the conditions laid down in sub-cl.(i) and (iv) to (viii) will get the benefit o....