Jain Exports Private Ltd. vs Commissioner Of Income-Tax
1987 Latest Caselaw 25 Del

JUDGMENT

1. After hearing counsel for both the parties at length, we are of the opinion that the following questions of law do arise out of the order of the Tribunal :

"(1) Whether, on the facts and in the circumstances of the case, the Tribunal had any material before it for limiting the relief of weighted deduction under section 35B to 80% in respect of those items of expenditure which it held were eligible for weighted deduction ?

(2) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in totally disallowing the relief of weighted deduction under section 35B of the Income-tax Act, 1961, in respect of local journey expenses and limiting it to 80% in respect of foreign traveling expenses ?"

2. So far as the first question is concerned, it does appear that a portion of the expenditure has to be disallowed but assuming this, the complaint of the assessed is that though full details were placed before the officers concerned, there is no particular basis on which the percentage of disallowance has been fixed by the various authorities. He complains that the percentage of 80% is arbitrary and not based on material. That is why we have thought it fit to direct the reference of this question.

3. So far as the second question is concerned, it is pointed out by counsel for the assessed that the Commissioner of Income-tax (Appeals) had allowed the entire foreign expenses but the Tribunal has scaled this down even though there was no appeal by the Department. He also complains that the local traveling allowances are also allowable to some extent and should not have been disallowed completely. This, in our opinion, does give rise to certain aspects of interpretation of the provisions of section 35B.

4. We, therefore, call upon the Tribunal to draw up a statement of case and refer the above two questions for the decision of this court. This application is disposed of. No costs.