In Brief
The appellant, a carpet manufacturer, paid Rs. 4,60,433 to a person in Brussels appointed to promote the sale of its goods abroad. The Assessing Officer denied weighted deduction under Section 35B(1)(b)(iv) of the Income Tax Act, arguing the appointee was not an "agent." The ITAT allowed the claim after examining the agency agreement and Reserve Bank approval. The High Court reversed, but the Supreme Court restored the ITAT order, holding that the formal agency agreement and RBI approval conclusively established an agency relationship qualifying for the weighted deduction of 4/3rd times the expenditure incurred."
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