{"id":218218,"date":"1986-03-17T00:00:00","date_gmt":"1986-03-16T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/pierce-leslie-india-ltd-vs-commissioner-of-income-tax-on-17-march-1986"},"modified":"2016-11-01T19:41:08","modified_gmt":"2016-11-01T14:11:08","slug":"pierce-leslie-india-ltd-vs-commissioner-of-income-tax-on-17-march-1986","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/pierce-leslie-india-ltd-vs-commissioner-of-income-tax-on-17-march-1986","title":{"rendered":"Pierce Leslie India Ltd. vs Commissioner Of Income-Tax on 17 March, 1986"},"content":{"rendered":"<div class=\"docsource_main\">Karnataka High Court<\/div>\n<div class=\"doc_title\">Pierce Leslie India Ltd. vs Commissioner Of Income-Tax on 17 March, 1986<\/div>\n<div class=\"doc_citations\">Equivalent citations: 1988 174 ITR 623 KAR, 1988 174 ITR 623 Karn<\/div>\n<div class=\"doc_bench\">Bench: M Sharif, N Venkatesh<\/div>\n<\/p>\n<pre><\/pre>\n<p>JUDGMENT<\/p>\n<p> K. Jagannatha Shetty, Actg. C.J. <\/p>\n<p> 1. This is a reference under section 256(1) of the Income-tax Act, 1961. The Tribunal has referred the following question for the opinion of this court :\n<\/p>\n<p>  &#8220;Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the applicant is not entitled to deduction under section 35B  in respect of the commission of Rs. 90,851 paid by it to the agents in India ?&#8221;\n<\/p>\n<p>2. The assessee paid commission in India to Indian agents to the extent of Rs. 90,851 in connection with its export business. The assessee claimed weighted deduction to the extent of 50% of that amount on the ground that it is an expenditure incurred wholly and exclusively on obtaining information regarding markets outside India for goods, services or facilities (section 35B(1)(b)(ii)). The Income-tax Officer declined to give the weighted deduction asked for on the ground that the said commission was paid by the assessee in the usual course of business. On appeal, the Commissioner of Income-tax (Appeals) felt that the claim of the appellant was allowable in view of the decision of the Special Bench of the Tribunal in a certain case called &#8220;J. Hemchand and Co.&#8221; But, the decision of the Commissioner of Income-tax (Appeals) was reversed by the Tribunal.\n<\/p>\n<p>3. The short question that falls for decision is &#8220;whether the claim of the assessee in regard to 50% of the commission paid in India to Indian agents could be considered for &#8216;weighted deduction&#8217; under section 35B(1)(b)(ii)  of the Income-tax Act as it stood then&#8221;.\n<\/p>\n<p>4. It was urged for the assessee that if it is proved that the expenditure was incurred by the assessee for obtaining information regarding markets outside India or for promotion of exports, the assessee would be entitled to weighted deduction, no matter where the payment is made.\n<\/p>\n<p>5. The contention may be good, but we have no sufficient material in the statement of facts much less in the order of the Tribunal that the expenditure was incurred for obtaining information regarding markets outside India for export promotion. In fact, the assessee appears to have not maintained any separate accounts in regard to expenditure incurred for obtaining such information. On the contrary, the assessee has paid a total sum of Rs. 90,851 during the relevant year in India to Indian agents and that payment was proved to have been made, as clearly stated by the Income-tax Officer &#8220;in its usual course of business&#8221;.\n<\/p>\n<p>6. Now, the assessee wants to state that 50% of that expenditure should be allowed for the purpose of weighted deduction. We do not know on what basis 50% of that amount has been claimed. In the absence of clear proof and separate accounts maintained for the purpose, we do not think that the conclusion of the Tribunal in negativing the claim of the assessee is in any way arbitrary or unjust.\n<\/p>\n<p>7. In the result, we answer the question in the affirmative and against the assessee.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Karnataka High Court Pierce Leslie India Ltd. vs Commissioner Of Income-Tax on 17 March, 1986 Equivalent citations: 1988 174 ITR 623 KAR, 1988 174 ITR 623 Karn Bench: M Sharif, N Venkatesh JUDGMENT K. Jagannatha Shetty, Actg. C.J. 1. This is a reference under section 256(1) of the Income-tax Act, 1961. The Tribunal has referred [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,20],"tags":[],"class_list":["post-218218","post","type-post","status-publish","format-standard","hentry","category-high-court","category-karnataka-high-court"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Pierce Leslie India Ltd. vs Commissioner Of Income-Tax on 17 March, 1986 - Free Judgements of Supreme Court &amp; High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/pierce-leslie-india-ltd-vs-commissioner-of-income-tax-on-17-march-1986\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Pierce Leslie India Ltd. vs Commissioner Of Income-Tax on 17 March, 1986 - Free Judgements of Supreme Court &amp; 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