Kewal Silk Emporium vs Commissioner of Income Tax

R.C. Lahoti, J.—This common order of reference referable to the assessment years 1978-79 and 1979-80 made at the instance of the asses-see seeks the opinion of the High Court on the following common question of law :

"Whether, on the facts and in the circumstances of the case, the expenditure of Rs. 80,570 (assessment year 1978-79) and Rs. 87,374 (assessment year 1979-80) on account of sale of goods to foreign tourists was eligible for weighted deduction u/s 35B of the Income Tax Act, 1961 ."

The statement of facts and the question itself as framed make it clear that the sale of goods had taken place within the country though the purchasers were foreign tourists. Expenditure was incurred on such sales. Such expenditure is not entitled to weighted deduction u/s 35B of the Income Tax Act, 1961, as it stood at the relevant time. Reference may be made to two recent decisions of the Supreme Court, namely, Commissioner of Income Tax (CNTL), Ludhiana Vs. Hero Cycles Pvt. Ltd., Ludhiana, and Commissioner of Income Tax, Delhi Vs. Stepwell Industries Ltd. and etc. etc., .

For the foregoing reasons the question is answered in the negative, i.e., in favor of the Revenue and against the assessees.