Commissioner Of Income Tax vs York Hosiery Mills (P.) Ltd.
1985 Latest Caselaw 146 Del

ORDER

D.K. Kapur, J.

1. This is a petition under s. 256(2) of the IT Act, 1961 praying that a reference be directed concerning the following question :

"Whether, on the facts and in the circumstances of the case the Tribunal is correct in law in holding that the assessed was entitled to weighted deduction under s. 35B of the IT Act, 1961 on the commission paid to State Trading Corporation which in fact is in the nature of selling expenses covered by the prohibitive clause in sub-clause (iii) of s. 35B(1)(b) ?"

2. We find that this point was decided by the ITAT during the hearing of the appeal on the basis of the Tribunal's decision in the asst. yrs. 1971-72 and 1972-73 wherein the commission paid to the State Trading Corporation had been allowed under s. 35B for the purpose of weighted deductions. There was no contention as to why this amount should not be allowed. So, there are no facts or law questions arising from the order of the Tribunal which has merely followed the previous orders.

3. When the petition under s. 256(1) was decided, the Tribunal not only reproduced its appellate order showing that the decision for earlier years had been followed but also stated that this point was covered by the decision of the Special Bench of the Appellate Tribunal, Bombay, in the case of J. Hem Chand & Co. Furthermore, the CBDT has accepted that decision and issued a circular and instructions that officers of the department should follow that judgment of the Special Bench. This matter should have concluded the question of when the weighted deduction was to be allowed.

4. However, the ld. counsel has brought the decision of J. Hem Chand & Co. and shown the same to us. He urges that the weighted deductions are to be allowed under the various clauses of s. 35B as it then stood, if the payment is made in India, but in case it is covered by s. 35B(1)(b)(iii), then the expenditure is not to be allowed if it is incurred in India. We have asked the ld. counsel how this clause applies in the circumstances of this case. He says that the onus is on the petitioner. He is unable to say how it falls under this sub-clause. In the circumstances no question of law arises.

5. This petition is dismissed with costs.