Rajnikant Bros. vs Commissioner of Income Tax

Dr. B.P. Saraf J.

By this reference u/s 256(1) of the Income Tax Act, 1961, the Income Tax Appellate Tribunal has referred the following question of law to this court for opinion :

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the following expenditure incurred by the assessee did not qualify for weighted deduction u/s 35B?"

1974-75 1975-76 Rs. Rs. Bank interest 55,290 1,12,406 Reassortment charges 26,398 27,867 Assortment charges 15,900 25,900 Motor car expenses 6,021 9,472

Learned counsel for the assessee submits before us that though the claim in regard to the number of items mentioned in the above question, is covered by a number of decisions rendered recently, the assess is entitled to weighted deduction in respect recently of assortment charges under item No. (ii) or (viii) of section 35B(1)(b) of the Income Tax Act, 1961.

We have carefully gone through the record. We, however, do not find any material to show that the assortment charges can be said to be expenditure - falling in the above two clauses. There is no material on record to show that these payments were in the nature of commission as claimed by the assessee. In that view of the matter, we are of the opinion that the Tribunal was justified in holding that the assessee is not entitled to weighted deduction on the assortment charges also.

Having regard to the above discussion and following the ration of the decision of this court in M.H. Daryani Vs. Commissioner of Income Tax, and a number of other decisions of this court on this section, we hold that the Tribunal was justified in holding that the expenditure incurred by the assessee mentioned in the question set out hereinabove did not qualify for weighted deduction u/s 35B of the Income Tax, 1961. We, therefore, answer the question referred to us in the affirmative, i.e., in favour of the Revenue and against the assessee.

No order as to costs.