High Court Of Allahabad
CIT vs. Ganeshi Lal & Sons
Section 35B
M. Katju & Umeshwar Pandey, JJ.
IT Ref. No. 282 of 1983
23rd September, 2003
JUDGMENT
M. Katju, J. :
This is an income-tax reference under s. 256(1) of the IT Act, 1961, in which the following question has been referred to us for our opinion :
“Whether, on the facts and in the circumstances of the case, the Tribunal was right in concluding that the counter sales within India, against foreign currency, should be treated as export sales ?” Heard learned counsel for the Department. Although the office report shows that on 29th May, 1985, notice has been served on the assessee, none has appeared on his behalf.
The assessee-firm deals in jewellery and antiques. It has a showroom at Agra where it sells jewellery and antiques to foreigners against foreign currency. The assessee claimed weighted deduction under s. 35B of the IT Act. Sec. 35B(1)(b) provides for grant of weighted deduction in respect of expenditure 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; (ii) obtaining information regarding markets outside India for such goods, services or facilities ; (iii) distribution, supply or provision outside India of such goods, services or facilities, not being expenditure incurred in India in connection therewith or expenditure (wherever incurred) on the carriage of such goods to their destination outside India or on the insurance of such goods while in transit;”
The expenditure referred to in sub-cl. (iii) of s. 35B(1)(b) refers to sales outside India and not within India. Hence, in our opinion s. 35B is not attracted at all to the sales in question since they are sales made within India.
The question referred to us therefore, is answered in the negative, i.e., in favour of the Department and against the assessee.
[Citation : 266 ITR 203]
