- (1.) This reference at the instance of the assessee is under s. 256(2) of the IT Act, 1961.
(2.) The assessment year involved is 1975-76. The assessee was a grower and manufacture of tea, besides exporting the same. Admittedly, the assessee in the original return filed on 30-9-1975 as also in the first revised return filed on 27-5-1976 did not put in any claim for deduction under s. 35B of the Act. In the second return filed on 19-8-1976, the assessee claimed weighted deduction under s. 35B in respect of the following expenditure stated to be export promotion expenses. (1) Air Freight on Parcel for samples. (2) Commission paid to agents to obtain order amount to which paid in foreign countries. (3) Steamer freight on Export Consignments. (4) Premium to export credit guarantee corpn. The ITO allowed weighted deduction in respects of Items 1 and 2 but disallowed the claim of the assessee for weighted deduction in respect of Item Nos. 3 and 4. Such disallowance was made on the ground that no deduction is admissible under s. 35B on Steamer freight and premium to export credit guarantee corporation according to provision of s. 35B(1)(b)(iii). On appeal the AAC upheld the said disallowance.
(3.) Admittedly, the assessee either in the original return or in the revised return never claimed weighted deduction in respect of the following items of expenditure. (a) Agency commission (b) Premium to Export Credit Guarantee Corporation (c) Inspection & Sampling (d) Telex charges (e) Packing expenses. As such the ITO never considered this aspect of the claim which were raised before the AAC for the first time. The AAC has further upheld the claim of the assessee in respect of these items of expenditure by holding that the assessee was entitled to the weighted deduction in respect of these items.;