SENGUPTA, J. - (1.) IN this reference made at the instance of the Revenue, the following questions have been referred by the Tribunal for the opinion of this Court under s. 256 (2) of the IT Act, 1961 ('the Act') : "1. Whether, on the facts and in the circumstances of the case and having regard to the fact that the assessee was not maintaining any agency office outside India, the Tribunal was correct in law in holding that the tax relief under s. 35B of the IT Act, 1961 would be available to the assessee in respect of the entertainment expenses incurred in Nepal ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that since the canteen was an integral part of the assessee's factory necessarily established according to the Factory Act, the canteen equipments were for the assessee's business on which it was entitled to investment allowance and thereby referring back the matter to the AO for reconsideration ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that general tools and spares were necessary for carrying out the assessee's business and, therefore, these should necessarily be termed as 'plant' for which the assessee would be entitled to investment allowance ?" The facts found by the Tribunal are as under:
(2.) THE assessee-company claimed weighted deduction under s. 35B of the Act, in respect of the asst. yr. 1980-81 on entertainment expenditure incurred in its Nepal office. The assessing authorities had refused to allow weighted deduction as claimed by the assessee-company only on the ground that the assessee did not incur this expenditure on maintenance of the agency outside India. The Tribunal, however, recorded a finding of fact that the assessee was having office in Nepal and such entertainment expenditure was incurred in its Nepal office. Question No. 1 appears to be based on presumption that the assessee was not maintaining any agency office outside India. This is contrary to the finding of fact recorded by the Tribunal. There is no challenge to the finding recorded by the Tribunal that the assessee was having office in Nepal and the entertainment expenses were incurred in Nepal office. We, therefore, reframe question No. 1 as under: "Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that weighted deduction under s. 35B of the IT Act, 1961 would be available to the assessee in respect of entertainment expenses incurred in its Nepal Office?'
(3.) IN view of the finding of facts recorded by the Tribunal as aforesaid, we answer question No.1 as reframed in the affirmative and infavour of the assessee.;