T. Anandavalli vs Commissioner of Income Tax

Ratnam, J.—In these tax cases u/s 256(1) of the Income Tax Act, 1961 (hereinafter referred to as "" the Act ""), at the instance of the

assessee, the following common question of law has been referred to this court for its opinion :

Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that the appellant is not entitled to

deduction u/s 35B of the Income Tax Act, 1961, for the assessment years 1973-74 and 1974-75 ?

The Tribunal has found that the assessee was a partner of a firm and the firm carried on business only in Malaysia. In other words, though the

partners were resident in India, the firm was a non-resident firm and it did not export any goods from India. Nor did the partners export any goods

on behalf of the firm. On the facts so found, the Tribunal concluded that the assessee is not entitled to weighted deduction u/s 35B of the Act. This

view of the Tribunal is fully supported by the decision of this court in S. Muthiah Vs. Commissioner of Income Tax, Madras, , wherein it has been

pointed out that if the firm or the partners of a non-resident firm had not exported any goods from India, the claim for weighted deduction u/s 35B

of the Act would fail. Similar would be the position in this case also. We, therefore, answer the common question of law referred to us in the

negative and against the assessee. There will be no order as to costs.