ORDER
At the instance of the revenue the Income Tax Appellate Tribunal, Amritsar (for short the Tribunal) has referred the following question of law arising out of its order dated 28-10-1983 relating to the assessment year 1979-80 for the opinion of this Court :
"Whether, on the facts and in the circumstances of the case, the ITAT is right in law in upholding the order of Commissioner (Appeals) allowing weighted deduction under [SECTION] of the [ACT], on various items of expenditure on proportionate basis without specifically relating to the expenditure to any of the [SECTION] of the [ACT] ?"
2. Mr. [ENTITY], learned counsel for the assessee has pointed out that the Tribunal has granted this relief on the basis of its earlier order in assessees own case for the assessment year 1976-77 which has since been upheld by this court in [PRECEDENT].
3. Although this contention of the learned counsel for the assessee is correct, yet it must be noticed that thereafter the Supreme Court in [PRECEDENT] and [PRECEDENT] has held that weighted deduction under [SECTION] of the [ACT] (the Act) can only be granted if the assessee is able to establish that the expenditure had been incurred wholly and exclusively in respect of the activities mentioned under various clauses of [SECTION] of the Act. We find that no such exercise had been undertaken either in the assessment year 1976-77 or in the year under consideration. In Stepwell Industries Ltd.s case (supra) the Supreme Court, has observed as under :
"In order to get this deduction, the assessee will have to prove that the expenditure was incurred during the previous year wholly and exclusively for the purposes set out in [SECTION]. There cannot be any blanket allowance of the expenditure nor can there be any blanket disallowance. Every case has to be discussed specifically and the expenditure must be found to be of the nature mentioned in any one of the sub-clauses. If the expenditure does not fall in any of these categories, it cannot be allowed as a deduction. Some of the sub-clauses provide that if the expenditure is incurred in India, it cannot be allowed but in some of the sub-clauses this requirement is not there. In such cases, the expenditure may or may not be incurred in India. Every case will have to be examined in the light of the provisions of the sub-clauses and the facts proved by the assessee."
4. Similarly in Hero Cycles (P) Ltd.s case (supra) the Apex Court has observed as under:
"In this case a large number of questions were sought to be raised. We shall deal with only the question relating to [SECTION] It appears that the Tribunal was totally unmindful of the various sub-clauses of [SECTION]. Expenses can only be allowed if they are wholly and exclusively incurred for any of the purposes mentioned in these sub-clauses. The section is quite clear and categorical. There is no way that any other expenditure can be given weighted deduction. Under [SECTION], it is the assessees duty to prove facts which will bring the case within any of these sub-clauses. Unless that is done the assessee will not be entitled to get this deduction. The Tribunal has allowed the deduction without verifying or examining the sub-clauses under which this could be allowed".
5. The matter, therefore, needs to be decided afresh in the light of the law laid down by the Apex Court in Stepwell Industries Ltd.s case (supra) and Hero Cycles (P) Ltd.s case (supra).
6. Accordingly, we set aside the findings of the Tribunal on this issue and restore the matter to the Tribunal for fresh adjudication. It is made clear that while re-deciding the matter, the assessee will be afforded sufficient opportunity to establish and justify its claim under various clauses of [SECTION] of the Act.
7. In view of the above observations, the question referred to us is answered in the negative, i.e., against the assessee and in favour of the revenue and the matter is remitted back to the Tribunal.