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Section 35B of the Income-tax Act, 1961 - Export markets development allowance - Assessment years 1978-79 to 1980-81 - Tribunal allowed weighted deduction under section 35B of 75 per cent of expenditure on salary and bonus and 50 per cent of other expenses including godown rent and motor car expenses - Tribunal had not looked into question whether expenditure was wholly or exclusively incurred for purpose of any of sub-clauses of section 35B(1) - Whether matter had to be examined by Tribunal to determine proportionate deduction depending upon number of persons working in export division - Held, yes FACTS The issue for consideration was regarding the weighted deduction under section 35 of 75 per cent of the expenditure on salary and bonus and 50 per cent of other expenditure including godown rent and motor car expenses. The Tribunal relied on the decision of the Special Bench of the Tribunal in the case of J. Hemchand & Co., while allowing the claim of the assessee to the extent of 75 per cent of the expenditure on salary and bonus and 50 per cent of the other expenditure and motor car expenses. The revenue contended that the Tribunal had not looked into the facts which would entitle a person to claim deduction. HELD After going through the of the Tribunal, it was found that the Tribunal had not looked into the question whether the expenditure was wholly or exclusively incurred for the purpose of any of the sub-clauses mentioned in clause (b) of section 35B(1). Therefore, on facts, the instant matter had to be examined by the Tribunal to determine the proportionate deduction depending upon the number of persons working in the export division. EDITOR'S NOTE 1. In view of decision in Kesaria Tea Co. Ltd. v. CIT [1991] 189 ITR 374 (Ker.), it was held that weighted deduction was not allowable on packing materials and allowable on printing expenditure. 2. In view of the decision in CIT v. Coromandel Agro Products Oil Ltd. [1998] 230 ITR 335 (AP), it was held that assessee was not entitled to weighted deduction on the shipping loan and in respect of a portion of the banking charges as expenditure incurred in India. 3. In view of the decisions of the Supreme Court…

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