- (1.) THE Tribunal, Jaipur Bench, Jaipur has referred the following question of law for our answer pursuant to RA No. 335/Jp/1988 arising out of ITA No. 971/Jp/1983 for the asst. yr. 1976 -77 : "Whether on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee was entitled to weighted deduction under s. 35B of the IT Act, 1961, in respect of the following expenses : 1. Air freight Rs. 94,037 2. Transport freight Rs. 2,995 3. Insurance Rs. 7,985 4. Interest paid to banks Rs. 71,206 In our view referable question of law does arise and we, therefore, draw up the statement of the case."
(2.) THE brief facts relating to the case are that the assessee claimed weighted deduction under s. 35B of IT Act in respect of various expenses incurred by it. The assessing authority held that following expenses did not qualify for the deduction under s. 35B : 1. Air freight Rs. 94,037 2. Transport freight Rs. 2,995 3. Insurance Rs. 7,985 4. Interest paid to banks Rs. 71,206
(3.) ON an appeal by the assessee the CIT(A) reversed the order of the assessing authority and directed to allow the weighted deduction on all the four abovenoted amounts. Aggrieved by the order passed by the Tribunal (sic - -authority) the appellant filed an appeal before the Tribunal. The Tribunal relying on a judgment in the case of Associated Stone Industries in ITA Nos. 1027/Jp/1981 and 1028/Jp/1981 held that the air freight and transport freight qualify for weighted deduction. The assessee's claim of weighted deduction on insurance and interest to bank was also accepted following the judgment in the case V.H. Jewellers vs. Asstt. CIT (2001) 71 TTJ (Jp) 184. Aggrieved by the order of the Tribunal, Revenue prayed for reference of the question quoted above, which is then referred to this Court. The counsel appearing for the Revenue submits that the judgment of the Tribunal in the case of Associated Stone Industries (supra) was referred to the High Court in DB IT Ref. No. 54 of 1985 CIT vs. Associated Stone Industries, that the reference regarding the air freight and transport freight may be decided in favour of Revenue and thereby the benefit of weighted deduction on air freight and transport freight should be disallowed. It is further submitted that even the benefit of weighted deduction on insurance as well as interest paid to the banks needs to be disallowed, in view of 221 CTR (Bom) 660 : (2009) 18 DTR (Bom) 164 - -Ed.]. Copy of the said judgment has been supplied for perusal and is kept on record.;