DIPAK KUMAR SEN, J. - (1.) THIS reference arises out of the assessment of Birla Jute Manufacturing Co. Ltd., the assessee, to income tax in the asst. yrs. 1973-74, 1974-75 and 1976-77. On an application of the assessee under s. 256(1) of the IT Act, 1961 the following questions have been referred as questions of law arising out of the order of the Tribunal for the opinion of this Court : 1. Question common to all the assessment year :"Whether on the facts and in the circumstances of the case the assessee is entitled to weighted deduction for Export Market Development Allowances in respect of the various expenses which the Tribunal disallowed?" 2. Common question" relating to asst. yrs. 1973-74 and 1974-75 : "Whether on the facts and in the circumstances of the case, the assessee's claim of deduction in respect of liability for sur-tax is allowable while computing the total income ?" 3. Question relating to the asst. yr. 1973-74 : "Whether on the facts and in the circumstances of the case, for the purpose of capital computation under s. 80J the actual cost of depreciation assets as against the written down value should be taken into account ignoring Rule 19A of the Income Tax Rules, 1962 ?"
(2.) THE controversy rised in question No. 2 is covered by a decision of this Court in Molins of India Ltd. vs. CIT West Bengal-III (1983) 35 CTR (Cal) 254 : (1983) 144 ITR 317 (Cal). Following the said decision we answer question No.2 in the negative and in favour of the Revenue. The controversy raised in question No. 3 is similarly covered by a decision of this Court in Bharat General and Textile Industries Ltd. vs. CIT (1986) 53 CTR (Cal) 418 : (1985) 153 ITR 747 (Cal). Following the said decision we answer the question in the negative and also in favour of the Revenue. We state that in computing the capital employed for the purpose of deduction under s. 80J of the IT Act, 1961, the written down value of the assets should be considered and not the actual cost. The facts pertaining to Question No. 1 are, inter alia, that in the asst. yr. 1973-74 the assessee claimed weighted deduction in respect of export market development allowance before the ITO and was allowed such deduction in respect of some items. On an appeal before the AAC the assessee subsequently claimed further deduction under s. 35B in respect of a number of additional items. The AAC allowed the assessee to make such further claim. The additional items for which the assessee claimed further deduction under s. 35B were, inter alia, as follows : (a) Commission in respect of export sales ; (b) Salaries to export staff ; (c) Ocean freight ; (d) Bank charges ; (e) Shipping Expenses ; (f) Postage, Telegram and Telephone ; (g) Stationery and Printing ; (h) Staff welfare expenses ; (i) Travelling expenses in India relating to export ; (j) Marine Insurance.
(3.) THE AAC allowed the claim of the assessee in respect of salaries to export staff, postage telegram and telephone and stationery and printing and directed the ITO to allow weighted deduction on the said items in the proportion as between the total sales and the export sales of the assessee. The AAC rejected the claim of the assessee in respect of the other items. On a further appeal by the assessee the Income-tax Tribunal allowed another item claimed by the assessee viz., commission in respect of export sales and disallowed the assessee's claim in respect of the other items which had also been disallowed by the AAC.;