Commissioner of Income Tax vs K. Haji Md. Ghouse Saheb and Co.

K.A. Thanikkachalam, J.—At the instance of the Department, the Tribunal referred the following two questions for the opinion of this court

for the assessment years 1978-79 and 1979-80 u/s 256(1) of the Income Tax Act, 1961.

Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is correct in law in holding that the assessee is entitled to

weighted deduction u/s 35B of the Income Tax Act in respect of the service charges paid to the State Trading Corporation and premium paid to

the Export Credit Guarantee Corporation for the assessment years 1978-79 and 1979-80 ?

There are two points that arise for consideration in these tax cases (1) Whether the assessee is entitled to deduction u/s 35B with regard to

service charges paid to the State Trading Corporation ? and (2) Whether the assessee is entitled to weighted deduction u/s 35B with regard to the

premium paid to Export Credit Guarantee Corporation ?

In so far as the first point is concerned, learned standing counsel represented that the question relating to the said point is not pressed.

In so far as the second point is concerned, various High Courts held that the assessee is entitled to weighted deduction u/s 35B in respect of the

premium paid to the Export Credit Guarantee Corporation in Commissioner of Income Tax Vs. Navabharat Enterprises (P.) Ltd., the Karnataka

in the case of Commissioner of Income Tax Vs. J.B. Advani and Company (Mysore) (Private) Ltd., the Calcutta High Court in Commissioner of

Income Tax Vs. Tungabhadra Industries Ltd., in the case of Commissioner of Income Tax, Delhi-I Vs. Indian Aluminium Cables Ltd. (No. 2), in

the case of Commissioner of Income Tax Vs. Alleppey Co. Ltd., . Accordingly, we return the question unanswered in so far as the first point is

concerned. In so far as the second point is concerned, we answer the question referred to us in the affirmative and against the Department.