Law: Income Tax Act, 1961

Section: 32

(a) Income-tax----Depreciation---Rate of depreciation---Higher rate applicable to rope-way structure-carriers---Lift installed in office building is a rope-way structure carrier used for business purposes---Entitled to depreciation at 15 percent.--¬Indian Income Tax Act, 1961, S.32---Indian Income Tax Rules, 1962, Appendix I, Part I, Item III(ii)B(15). (b) Income-tax-----Export markets development allowance---Weighted deduction---Scope of S.35-B(1)(v)---Not necessary that expenditure should have been incurred outside India---Salary and allowances paid in India for service rendered in respect of export---Assessee doing business in India arid also exporting goods---Salary and allowances attributable to export entitled to weighted deduction---Expenditure incurred in respect of attestation and legalisations of export invoices and legal expenses incurred in connection with export---Not entitled to weighted deduction---Indian Income Tax, 1961, S.35-B. Held, that lift is machinery in view of the fact that the lift is moving up and down with the help of twisted steel rope within a structure. It can also be considered as a rope-way structure-carrier entitled to the higher rate of 15 percent depreciation as per entry III(ii)B(15) of the depreciation Schedule. Further, inasmuch as the lift was used in the office building for business purposes, the higher depreciation was allowable. CIT v. Jyoti Limited (1987) 163 ITR 274 (Guj.) applied. If weighted deduction is claimed in respect of the expenditure under sub-clause (iii of section 35-B(1)(b) of the Income Tax Act, 1961, alone, the expenditure ought to have been incurred outside India. The stipulation found in sub-clause (iii) does not find a place in sub-clause (v). Therefore, it cannot be said that under section 35-B(1)(v) for claiming weighted deduction the expenditure ought to have been incurred outside India. In case it is found that the assessee was required to employ some one for the activities stipulated under section 35-B(1)(b)(v) of the Act and pay any wages or emoluments or engage someone who also worked for matters falling .under section 35-B(1)(b)(v), the assessee can claim apportionment and seek allowances.…

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