Commissioner Of Income-Tax vs Associated India Exports
1990 Latest Caselaw 237 Del

JUDGMENT

B.N. Kirpal, J.

1. The petitioner seeks reference of the following three questions to this court :

"1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessed was entitled to claim the expenditure under the head 'carpet gifted to foreign buyer' even though the same was hit by the provisions of rule 6B of the Income-tax Rules, 1962?

2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessed-firm was entitled to weighted deduction under section 35B on expenditure incurred in connection with the carpet gifted to the foreign buyer?

3. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessed was entitled to weighted deduction on expenses claimed under the head 'Packing and forwarding charges?"

In our opinion, question No. 1 is a pure question of fact and rule 6B is, on the face of it, not applicable because that rule applies to expenses incurred on advertisement. The finding of fact in this case is that, to a foreign customer, a carpet worth Rs. 3,000 was presented. This surely is not a case of advertisement on behalf of the assessment when, admittedly, the assessed earns a lot of income from its foreign customers.

As regards the other two questions, the interpretation of section 35B is involved and, therefore, we direct the Tribunal to state the case and refer the aforesaid question Nos. 2 and 3 to this court. No order as to costs.