Jawahar Lal Gupta, J. - (1.) THE assessee filed its return for the assessment year 1980 -81. It returned an income of Rs. 5,09,384. The Assessing Officer disallowed certain expenses and made the additions. The assessee appealed. It was partly allowed. The Revenue and the assessee appealed to the Tribunal. The matter was decided vide order dated April 12, 1985. Both sides were still not satisfied. They approached the Tribunal with petitions under Section 256(1) of the Income Tax Act, 1961. The Tribunal has referred the following two questions in the petition filed by the Revenue : "1. Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in allowing weighted deduction on miscellaneous expenses of Rs. 25,70, 195 which included salary and other establishment expenses ? 2.HETHER , on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is right in law in holding that the expenses on account of commission paid to the agents/marketing organisers amounting to Rs. 6,13,578 and Rs. 10,33,787 being turnover discount paid to the distributors are not to be taken into account for the purpose of disallowance under Section 37(3A) of the Income Tax Act -
(2.) Similarly, the Tribunal has also referred the following three questions on the petition filed by the assessee : "1. Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in holding that the claims of the appellant -company are not entitled for weighted deduction under Section 35B in respect of the following expenses : (a) Handling charges for export consignments 51,580 (b) Export packing on export consignments (i) Card board boxes 1,23,875 (ii) Wooden cases 88,422 2,12,297 (c) Interest on export promotion 2,74,877 (d) Bank charges for bid board and performance guarantee for export contracts 1,10,538 (e) Salary to export department exclusively engaged in the export promotion 45,053 2. Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in holding that only 20 per cent, of the expenses out of Rs. 26,34,060 under the head 'Miscellaneous expenses' can be considered for the purpose of weighted deduction under Section 35B ? Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in holding that sum of Rs. 60,571 received by the appellant on transfer of assessee's right to import entitlements against export, is a revenue receipt - Mr. B.S. Gupta, learned counsel for the assessee, has stated at the outset that he does not press questions Nos. 2 and 3 as referred by the Tribunal. Resultantly, he accepts the order passed by the Tribunal. So far as question No. 1 as raised by the Revenue and the assessee, respectively, is concerned, counsel for the parties are agreed that in view of the Rule enunciated by their Lordships of the Supreme Court in CIT v. : [1997]228ITR171(SC) and CIT v. : [1997]228ITR463(SC) , the order of the Tribunal has to be set aside and the case has to be remanded for a fresh decision.
(3.) IN view of the two decisions of their Lordships as noticed above, counsel appear to be right. Accordingly, the Tribunal's order dated April 12, 1985, in so far as the claim for deductions under Section 35B of the Income Tax Act, 1961, is concerned is set aside. The case is remanded to the Tribunal for a fresh decision so as to enable the assessee to prove the nature of the expenditure and to show that it falls within one of the sub -clauses of Section 35B(1)(b) of the Act. The Tribunal shall decide the matter after giving the assessee an opportunity of proving the nature of the expenditure.;