R.K. Agrawal, J. - (1.) THE Income-tax Appellate Tribunal has referred the following question of law under Section 256(1) of the Income-tax Act (hereinafter referred to as the Act) for opinion to this court : "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was legally correct in holding that weighted deduction is permissible under Section 35B(l)(b)(viii) of the Income-tax Act, 1961, in respect of an expenditure incurred in India on insurance, shipment, freight, despatch and clearing and transportation of the goods to their destination ?"
(2.) THE said question of law arises out of the order dated January 2, 1981, passed by the Income-tax Appellate Tribunal in Income-tax Appeal No. 2179 (Alld.) of 1979 relating to the assessment year 1978-79. The facts of the case in brief are that the respondent-assessee is a registered firm and is engaged in the business of tanning of raw hides and sale thereof. It also exports tanned leather. During the assessment year 1978-79, the respondent-assessee claimed weighted deduction under Section 35B of the Act, in respect of the following amounts : JUDGEMENT_5_ITR244_2000Html1.htm
(3.) THE Income-tax Officer did not accept the claim of the respondent-asses-see for weighted deduction under Section 35B of the Act in respect of the aforesaid items of expenditure. THE Commissioner of Income-tax (Appeals), upheld the order of the Assessing Officer. THE respondent-assessee filed an appeal against the aforesaid order before the Income-tax Appellate Tribunal. It was pointed out before the Tribunal that the assessee's export contracts were either C.I.F. contracts or C and F contracts. C.I.F. contracts meant cost inclusive of insurance and freight, whereas C and F contract meant cost and freight. According to the respondent-assessee in respect of such contracts under which exports had taken place the amounts claimed by the assessee for weighted deduction were permissible under Section 35B, viz., under its Sub-section (1)(b)(viii) of the Act. On behalf of the Department, it was pointed out before the Tribunal that the nature of the contracts were not looked into by the lower authorities and in any event the items of expenditure for which weighted deduction is being claimed is not allowable under law. However, the Tribunal relying upon the decision rendered on December 24, 1979, passed by the Chandigarh Bench in I.T.A. No. 463 of 1977-78, reported in [1980] T.L.R. 124, allowed the claim of the respondent-assessee. We have heard Shri A. N. Mahajan, learned counsel for the Department, and Shri Vikram Gulati, learned counsel for the respondent-assessee.;