The main legal point established in the judgment is the interpretation of the provisions of Section 35b (1) (b) and Section 40a (5) (a) of the Income-tax Act, and their application to the payments made by the assessee and the classification of insurance premia as a perquisite.

K. S. PUTTASWAMY, J.

( 1 ) AS parties in these cases are common and one of the questions that arises for determination is common, we propose to dispose of them by a common order.

( 2 ) MESSRS J. B. Advani and Company (Mysore) (Private) Limited, Bangalore, which is the common assessee in these cases, is inter alia engaged in the manufacture of electronic equipments such as chokes, amplifiers and T. V. antennas at its factory situated at Nasik and distribution of newsprint paper, electrodes and export of coffee, tea and pepper.

( 3 ) FOR the assessment years 1975-76 and 1976-77 relevant to the accounting years ending on march 31, 1975 and March 31, 1976 respectively, the assessee filed its returns before the income-tax Officer, Company Circle-I, Bangalore, inter alia, claiming sums of Rs. 8,881 and Rs. 9,342 respectively as deductible expenditure under Section 35b of the Income-tax Act of 1961 ("the Act"), for the aforesaid assessment years. The assessee also claimed deduction of premiums paid on an insurance policy taken out by it in the name of one Sri S. K. Sippy employed as its manager under Section 40a (5) (a) of the Act.

( 4 ) ON an examination of the returns filed by the assessee for the aforesaid years, the Income-tax officer did not accept the aforesaid claims and disallowed them for various reasons. Against the said assessment orders of the Income-tax Officer, the assessee filed appeals before the Appellate assistant Commissioner of Income-tax, Bangalore Range-III, Bangalore, who by his orders dated January 22, 1977 and January 25, 1977 allowed them and accepted the aforesaid claims of the assessee. Against the said orders of the Appellate Assistant Commissioner, the Revenue filed appeals before the Income-tax Appellate Tribunal, Bangalore Bench, (Tribunal), which by its common order made on June 30, 1978 dismissed the said appeals. Hence, these references at the instance of the Revenue.

( 5 ) IN both the references, one of the questions that is common for the two assessment years reads thus : 1. "whether, on the facts and in the circumstances of the case, the Tribunal was right in law in allowing expenditure of a sum of Rs. 8,881 and Rs. 9,342 for the assessment years 1975-76 and 1976-77 respectively incurred by the assessee company as falling under Section 35b (1) (b) ?"

( 6 ) SRI K. Srinivasan, learned senior standing counsel for the income-tax Department, appearing for the Revenue, contends that the amounts paid by the assessee to the Export Credit Guarantee corporation are not paid for the promotion of exports and, therefore, question No. 1 in both the references has to be answered in favour of the Revenue and against the assessee.

( 7 ) SRI G. Sarangan, learned counsel appearing for the assessee, contends that on the finding of fact recorded by the Tribunal and the plain language of Section 35b (1) (b) of the Act, the deduction claimed had been rightly allowed by the Tribunal and the Appellate Assistant commissioner and, therefore, the question has to be answered in favour of the assessee.

( 8 ) ON the two payments, that are the subject of a common question referred to us, the Tribunal has found thus :

"the department is aggrieved by this order. A copy of the order of the Tribunal has been placed before us. The Bombay Bench of the Tribunal has held that the premium is paid to the Export credit Guarantee Corporation for getting information regarding the creditworthiness, reputation and fixing the limits of the buyers and it would be covered by Clauses (ii) (vi) and (vii) of section 35b (1) (b) of the Income-tax Act, 1961, and the expenditure would qualify for weighted deduction. The learned departmental representative has not been able to point out that the reasons for payment of the premium are different from those stated by the Appellate Assistant commissioner and by the Bombay Bench of the Tribunal. Therefore, following the order of the bombay Bench of the Tribunal, we hold that the Appellate Assistant C

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