Law:

Section:

Section 40A(5) of the Income-tax Act, 1961 - Business disallowance - Remuneration, etc., paid in excess of prescribed limits in case of company, etc. - Assessment years 1975-76 to 1978-79 - Whether value of rent-free accommodation and depreciation allowance on furniture and car provided by assessee-company to its employees is required to be included while computing disallowance under section 40A(5) - Held, yes Section 32 of the Income-tax Act, 1961 - Depreciation - Extra-shift allowance - Assessment years 1975-76 and 1976-77 - Whether extra-shift allowance cannot be restricted to number of days during which new machinery or plant has actually worked and it is allowable on basis of number of days during which assessee-company had actually worked double or triple shift - Held, yes Section 28(iiic) of the Income-tax Act, 1961 - Business income - Duty drawback - Assessment years 1975-76 to 1978-79 - Whether cash incentive received by assessee under export promotion scheme is chargeable to tax under head 'Profits and gains of business or profession' - Held, yes Section 35B of the Income-tax Act, 1961 - Export markets development allowance - Assessment years 1975-76 to 1978-79 - Whether assessee is not entitled for weighted deduction in respect of expenses incurred on export levy and on carriage of goods and insurance while on transit which has been incurred in India - Held, yes FACTS The assessee-company was running a textile mill and was also engaged in exporting its goods. For the relevant assessment years, the Assessing Officer included the amount of depreciation in respect of furniture and car and value of rent free accommodation provided by the assessee to its employees while computing disallowance under section 40A(5). The assessee claimed deductions in respect of; (1) weighted deduction under section 35B in respect of its expenses incurred on export levy and on carriage of goods; (2) cash incentive received under the Export Promotion Scheme (3) extra-shift allowance in regard to machinery added during the year. The Assessing Officer rejected the claim of weighted deduction on the ground that the expenses were incurred in India, therefore, they were not…

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