Insertion of new sections 35B and 35C

Section 5 of the Finance Act, 1968 deals with insertion of new sections 35B and 35C. Insertion of new sections 35B and 35C 5. After section 35A of the Income-tax Act, the following sections shall be inserted, namely:— Export markets development allowance '35B. The Act was enacted on 11 May 1968.

Insertion of new sections 35B and 35C

5. After section 35A of the Income-tax Act, the following sections shall be inserted, namely:—

Export markets development allowance

'35B. (1) (a) Where an assessee, being a domestic company or a person (other than a company) who is resident in India has incurred after the 29th day of February, 1968, whether directly or in association with any other person, any expenditure (not being in the nature of capital expenditure or personal expenses of the assessee) referred to in clause (b), he shall, subject to the provisions of this section, be allowed a deduction of a sum equal to one and one-third times the amount of such expenditure incurred during the previous year.

(b) The expenditure referred to in clause (a) is that incurred wholly and exclusively on—

(i) advertisement or publicity outside India in respect of the goods, services or facilities which the assessee deals in or provides in the course of his business;

(ii) obtaining information regarding markets outside India for such goods, services or facilities;

(iii) distribution, supply or provision outside India of such goods, services or facilities;

(iv) maintenance outside India of a branch, Office or agency for the promotion of the sale outside India of such gdoids, services or facilities;

(v) preparation and submission of tenders for the supply or provision outside India of such goods, services or facilities, and activities incidental thereto;

(vi) furnishing to a person outside India samples or technical information for the promotion of the sale of such goods, services or facilities;

(vii) travelling outside India for the promotion of the sale outside India of such goods, services or facilities, including travelling outward from, and return to, India;

(viii) performance of services outside India in connection with, or incidental to, the execution of any contract for the supply outside India of such goods, services or facilities;

(ix) such other activities for the promotion of the sale outside India of such goods, services or facilities as may be prescribed.

Explanation.- In this section, "domestic company" shall have the meaning assigned to it in clause (2) of section 80B.

(2) Where a deduction under this section is claimed and allowed for any assessment year in respect of any expenditure referred to in sub-section (1), deduction shall not be allowed in respect of such expenditure under any other provision of this Act for the same or any other assessment year.

Agricultural development allowance

35C. (1) (a) Where any company is engaged in the manufacture or processing of any article or thing which is made from, or uses in such manufacture or processing as raw material, any product of agriculture, animal husbandry, or dairy or poultry farming, and has incurred, after the 29th day of February, 1968, Whether directly or through an association or body which has been approved for the purposes of this section by the prescribed authority, any expenditure in the provision of any goods, services or facilities specified in clause (b) to a person [not being a person referred to in clause (b) of sub-section (2) of section 40A] who is a cultivator, grower or producer of such product in India, the company shall, subject to the provisions of this section, be allowed a deduction of a sum equal to one and one-fifth times the amount of such expenditure incurred during the previous year.

(b) The goods, services or facilities referred to in clause (a) are the following —

(i) fertilisers, seeds, pesticides, concentrates for cattle and poultry feed, tools or implements, for use by such cultivator, grower or producer;

(ii) dissemination of information on, or demonstration of modern techniques or methods of agriculture, animal husbandry or dairy or poultry farming oradvice on such techniques or methods;

(iii) such other goods services or facilities, as may be prescribed.

Explanation.—In computing the expenditure with reference to which deduction under this section is to be allowed, the amount, if any, received by the company in consideration of or as compensation for, such goods, services or facilities shall be deducted.

(2) Where a deduction under this section is claimed and allowed for any assessment year in respect of any expenditure of the nature specified in sub-section (1) deduction shall not be allowed in respect of such expenditure under any other provision of this Act for the same or any other assessment year.'.

[Finance Act, 1968]

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Section 5, The Finance Act, 1968 (Act 19 of 1968).