revenue has filed this appeal against order of Commissioner (Appeals) on various grounds. first ground relates to assessee's claim for depreciation on assets which were formerly used for scientific research. By Finance (No. 2) Act, 1980, provisions of section 35(2)(iv) of Income- tax Act, 1961 ('the Act') were amended retrospectively so as to deny assessee's claim for relief under section 32 of Act in respect of such assets. assessee, therefore, filed writ petition in Bombay High Court under article 226 of Constitution of India restraining ITO from taking into account retrospective amendment of section 35(2)(iv) for assessment year under consideration. High Court by order dated 17-12-1980 granted injunction as prayed by assessee. And yet, ITO while framing assessment for year under consideration made assessment under section 143(3) of Act by applying retrospective amendment of section 35(2)(iv). assessee appealed before Commissioner (Appeals) against action o f ITO in this respect. Commissioner (Appeals) took note of High Court order and granted consequential relief. 2. revenue is in appeal against order of Commissioner (Appeals) in this respect. At time of hearing of appeal, factual position as laid out above was discussed. We find that order of Commissioner (Appeals) is in conformity with High Court's order dated 17- 12-1980 and calls for no interference. 2. assessee, in course of assessment proceedings, claimed relief under section 35B of Act in respect of expenses amounting to Rs. 16,76,647. ITO was of opinion that out of above expenses, expenses of Rs. 3,43,171 were not eligible for relief under section 35B. In respect of balance, he allowed relief under section 35B. Included in above expenses in respect of which ITO granted relief under section 35B was item of entertainment to foreign customers amounting to Rs. 52,196. assessee's claim was, however, confined to expenses amounting to Rs. 6,559 out of same. Thus, ITO allowed deduction of 50 per cent of Rs. 6,559 in assessment as required under section 35B. However, he disallowed total entertainment expenses of Rs. 34,586 wherein was included aforesaid amount of Rs. 6,559. This disallowance was stated to have been made under section 37 of Act. 4. assessee appealed before Commissioner (Appeals) on ground that while allowing deduction of extra 50 per cent in respect of entertainment expenses incurred by assessee for foreign customers in amount of Rs. 6,559, ITO had accepted that assessee had incurred this expenditure for promotion of exports, but ITO had disallowed item of expenditure of Rs. 6,559 itself ITO's action was totally incongruous. Commissioner (Appeals) accepted this argument and allowed assessee's claim for expenditure of Rs. 6,559. 5. revenue is in appeal against order of Commissioner (Appeals) in this respect. It was submitted that admittedly expenditure of Rs. 6,559 was for purposes of entertainment and Commissioner (Appeals) could not have allowed it under Explanation 2 to section 37(2). On behalf of assessee, same argument as was made before Commissioner (Appeals), has been repeated, viz., that having held that expenditure was for promotion of exports, claim had to be examined under section 35B. Once claim was considered under section 35B, it could not be examined again under section 37. 6. We have carefully considered facts and circumstances of case and arguments on either side. assessee is manufacturer of radios and has large volume of exports. For purpose of promotion of these exports, it h s incurred expenses to extent of Rs. 16,76,647. assessee has claimed this expenditure as for promotion of exports. ITO has, in fact, accepted assessee's plea to extent of Rs. 13,33,472. Included therein is amount of Rs. 6,559 for entertainment of foreign customers. question for consideration is whether this claim for deduction of sum of Rs. 6,559 should be examined under provisions of section 35B or under provisions of section 37. Under provisions of section 35B where assessee has incurred any expenditure wholly and exclusively for various purposes laid down in section 35B(1)(b) he shall, subject to provisions of section, be allowed deduction of sum equal to one and one-third times amount of such expenditure incurred during previous year. In case of domestic company in which public are substantially interested, allowance is to extent of one and one-half times. Under provisions of section 37 any expenditure (not being expenditure of nature described in sections 30 to 36 and section 80VV of Act and not being in nature of capital expenditure or personal expenses of assessee), laid out or expended wholly and exclusively for purposes of business or profession shall be allowed in computing income chargeable under head 'Profits and gains of business or profession'. [Emphasis supplied]. On plain perusal of these two sections together, it is clear that when assessee makes claim for expenditure, ITO has to examine admissibility of expenditure, first under sections 30 to 36 and section 80VV. If expenditure does not fall under any of aforesaid sections, then ITO has to examine same under residuary provisions of section 37. If claim is to be and has been considered under any of sections 30 to 36 or section 80VV, claim cannot be considered again by criteria laid out under section 37. In instant case, ITO has apparently considered claim under section 35B, he has said so in so many words and held that expenditure of Rs. 6,559 was eligible for relief under section 35B. Having done so, it was obligatory on ITO to have granted as much relief as was admissible under section 35B. Further, he could not have circumscribed relief under any other provisions of Act, such as section 37. ITO has committed two mistakes in this case. In first place, he should have granted relief under section 35B of one and one-half times. He has merely granted relief of half time. second mistake is that he has sought to circumscribe relief by severe restrictions laid down on entertainment expenditure under section 37. Having once found that expenditure was for purposes o f promotion of export trade, he should have focused all his attention to provisions of section 35B and not other section. Commissioner (Appeals) in his order under appeal before us has rectified both these errors by allowing deduction in respect of this expenditure equal to one and one-half times of expenditure. No doubt, order of Commissioner (Appeals) is not very happily worded. But intention and effect thereof are quite patent. order of Commissioner (Appeals) calls for no interference and is upheld. 7 and 8. [These paras are not reproduced here as they involve minor issues.] *** INCOME TAX OFFICER v. BUSH INDIA LTD.