Law:

Section:

Section 35B(1)(b)(iii) of the Income-tax Act, 1961 - Export markets development allowance - Assessment year 1980-81 - Whether expenses on storage of goods are entitled to weighted deduction if incurred on keeping goods in warehouse before their sale - Held, yes Section 35B(1)(b)(ix) of the Income-tax Act, 1961, read with rule 6AA of the Income-tax Rules, 1962 - Export markets development allowance - Assessment year 1980-81 - Whether rule 6AA inserted from 1-8-1981 is applicable retrospectively - Held, no FACTS On a scrutiny of the assessment records of the assessee the Commissioner found that the ITO had wrongly allowed weighted deduction under section 35B in respect of certain expenses, including expenses on maintenance of a warehouse outside India. In response to notice under section 263, issued by the Commissioner, the assessee stated that the ITO had rightly allowed under section 35B(1)(iii) the expenditure on maintenance of a warehouse outside India. As an alternative, the assessee contended that the weighted deduction would be allowable under section 35B(1)(b)(ix ), read with rule 6AA. The Commissioner held that as rule 6AA was effective from 1-8-1981. deduction under section 35B(1)(b)(ix ), read with rule 6AA. was not admissible for the assessment year 1980-81, and to that extent, the order of the ITO was erroneous insofar as it was prejudicial to the interests of the revenue. He, therefore, directed the ITO to revise the assessment order by withdrawing the weighted deduction. On appeal, the Tribunal set aside the orders of the lower authorities and restored the matter to the file of the ITO. The Tribunal observed that if the warehouse charges were found, on examination, to have been incurred for keeping the assessee's goods before their sale, weighted deduction had to be allowed under section 35B(1)(b)(iii ). But if the warehouse charges represented storage expenditure in transit in the course of the carriage of goods, weighted deduction would not be allowed. The ITO was, accordingly, directed to make a fresh assessment order after allowing the assessee a reasonable opportunity of being heard. As regards the alternative contention, the Tribunal held…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492