Mrs. Sujata Manohar, J.
1. This is an application under s. 256(2) of the I.T. Act, 1961, for asking the Tribunal to state a case and raise the following questions of law :
'(1) Whether, on the facts and in circumstances of the case, in the absence of any evidence of the service rendered to the assessee for which the payment of Rs. 3,59,969 styled as commission to agent was paid to M/s. Khimji Ramdas of Muscat, the Tribunal was justified in holding that the amount did not represent trade discount in respect of direct sale to the firm on its own so that weighted deduction under section 35B(1)(b) of the Income-tax Act, 1961, was due to it ?
(2) Without prejudice to the above question, whether, on the facts and in the circumstances of the case, the Tribunal was right in law in directing the allowance of weighted deduction under section 35B(1)(b) of the Income-tax Act, 1961, in respect of expenditure of Rs. 3,59,969 claimed as commission to its agent M/s. Khimji Ramdas of Muscat ?
(3) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the guarantee commission paid by the assessee to its directors does not come within the provisions of section 40(c) read with section 40A(5) of the Income-tax Act, 1961 ?'
2. Rule has been issued only in respect of question No. 2 stated above.
3. According to the Department, weighted deduction under s. 35B(1)(b) of the I.T. Act, 1961, should not be granted in respect of expenditure of Rs. 3,59,969, as according to the Department this was an amount in the nature of the trade discount and not commission to their agents abroad as claimed by the assessee. The Tribunal has found that what was paid to M/s. Khimji Ramdas of Muscat was by way of commission. This was an amount which was separately sent to the agent after obtaining necessary approval of the Reserve Bank of India. The Tribunal held that on the material placed before it, it was clear that the foreign party had been paid commission at the stipulated rate of 10% in respect of its order. Mr. R. J. Joshi, learned counsel for the Department, contended that this payment was not entitled to weighted deduction under s. 35B(1)(b) of the I.T. Act, 1961. He produced before us the agreement which is dated September 11, 1963, between the assessee and its agents, M/s Khimgi Ramdas of Muscut. The agreement is an agreement of agency. Under one of the clauses of the agreement, the agents are required to lose their best endeavour to secure a certain amount of business. The minimum amount of such business is also prescribed under the agreement. The agents are also required to publicise the assessee's products in the agent's territory and are required to maintain show-rooms at their own expense of a certain minimum size. In view of this agreement and in view of the circumstances of the case, the payment made to these agents would fall under s. 35B(1)(b), sub-clauses (ii) and (ix), of the I.T. Act, 1961. Since the position is clear, we do not see any reason why the Tribunal should be asked to state the case and refer this question to us. Rule is, therefore, discharged with costs.