appellant-assessee filed this second appeal on 15-2-1982 against order dated 2-1-1982 passed by Commissioner (Appeals). In memorandum as many as four effective grounds were taken, which we are reproducing below, fifth is stated to be general ground which craves leave to add to, alter, vary or amend grounds of appeal: "1. It is submitted that learned Commissioner (Appeals) should have allowed relief under section 80J of Income-tax Act, 1961, in respect of appellant's production Unit-III at Rs. 19,11,831 instead of at Rs. 16,02,611 only. 1.1 It is further submitted that assessee's claim under section 80J was based on correct application of provisions of Act, as evidenced by various High Courts, which have ruled that for purpose of section 80J 'capital employed' should not be confused with 'capital used'. To that extent, rule 19A (2) (i) of Income-tax Rules, 1962, which talks of written down value of fixed assets, does not bring out intentions and purpose of incentive under section 80J correctly. It is, therefore, contended that only actual cost of fixed assets should be taken for purpose of average capital employed under section 80J. It is submitted that learned Commissioner (Appeals) should have taken this into account. 2. learned Commissioner (Appeals) has erred in law in not allowing weighted deduction under section 35B of Income-tax Act, 1961 on exchange rate difference of Rs. 7,75,211, inland freight on export consignments of Rs. 7,68,173 and packing materials consumed exclusively for exports of Rs. 25,02,836. 3. learned Commissioner (Appeals) has erred in law in not allowing claim made by appellant by way of deduction of surtax liability from total income as necessary business expenditure under section 28 or 37 of Income-tax Act, 1961. 4. Without prejudice to above grounds, it is submitted that appellant is of opinion that assessment for this year is barred by limitation. 4.1 Income-tax Officer passed order under section 144B/143(3). Section 144B was introduced from 1-1-1976 and amount fixed by Board is necessary pre-condition under section 144B (1). Board has issued order fixing up amount on 23-12-1975 by virtue of power given under section 144B (6). As section 144B becomes effective only from 1-1-1976 Board's order dated 23-12-1975, exercising powers conferred by section 144B (6) becomes invalid. Therefore, it is contended that assessment get time barred on this account." 2. On 25-2-1982 for assessee additional grounds of appeal dated 27-4- 1982 were submitted in Registry of Delhi Benches of Tribunal, reading as follows: "1. That learned ITO and Commissioner (Appeals) failed to recognize n d give due legal relief owing to fact that 'cash compensatory support' received by appellant of amount of Rs. 86,73,677 was in nature of capital receipt and that it was not taxable, notwithstanding fact that same has been treated as 'revenue receipt' and included in taxable profits of appellant. 2. That learned ITO and Commissioner (Appeals) failed to recognise and give due legal relief owing to fact that 'draw-back of duty' of amount of Rs. 18,17,445 was in nature of capital receipts and that it was not taxable notwithstanding fact that same has been treated as 'revenue receipt' and included in taxable profit of appellant. 3. That learned ITO and Commissioner (Appeals) failed to recognise n d give due legal relief owing to fact that 'income from sale of import entitlement' of amount of Rs. 47,38,202 was in nature of capital receipt and that it was not taxable notwithstanding fact that same has been treated as 'revenue receipt' and included in taxable profit of appellant. 4. That without prejudice to any to aforesaid grounds of appeal, appellant also claims that learned assessing authority failed to apply provisions of section 10(17B) of Income-tax Act which, as matter of duty, case on it and determine that none of amounts indicated above could be included by virtue of these provisions in total income of appellant. 5. That without prejudice to any one or more of aforesaid grounds of appeal, appellant submits that assessing authority failed to determine correct head of income under which impugned receipts were to be brought to tax as income and, that in any event, they erred in law in bringing them to tax under head 'Profits and gains of business or profession'. 6. That without prejudice to any one or more of aforesaid grounds of appeal, appellant submits that assessing authority erred in taxing grants made by Government from Consolidated Fund of India for specific purpose-for export promotion-under various schemes, to exporters ignoring that same are not taxable as per charging provisions of Income-tax Act, 1961, thus violating article 266(3) of Constitution of India." 3. It may be mentioned here that in respect of assessment year 1975- 76 also assessee filed additional grounds of appeal in relation to its second appeal submitted on 30-3-1979. For that year even revenue filed additional grounds before Tribunal. Further additional grounds filed for this year are more or less on same pattern as for assessment year 1975-76. 4. We have dealt with most of additional grounds vide our order of even date in IT Appeal Nos. 1143 and 1826 (Delhi) of 1979, but before referring to same, we like to bring in focus grounds in original memorandum. 5. In ground Nos. 1 and 1.1, assessee claimed relief under section 80J of Income-tax Act, 1961 ('the Act') to tune of Rs. 16,02,611, which was reduced by ITO to Rs. 11,89,718 in respect of production unit No. III. 6. Hon'ble Supreme Court had granted stay of retrospective operation o f amendment of section 80J in assessee's own case in following words: "(a) operation of imposition of income-tax as per section 80J as amended by Finance (No. 2) Act, 1980 for assessment years 1974-75 to 1980-81 [that is in accordance with section 80J (1A)] and collection of income-tax in pursuance of section 80J (IA) insofar as first petitioner's income-tax in pursuance of section 80J (IA) insofar as first petitioner's company is concerned be and are hereby stayed, and (b) collection of income-tax in pursuance of order dated 25th day of August, 1980 passed by 2nd respondent herein in appeal for assessment year 1974-75 also be and is hereby stayed with liberty to respondents herein to move Court again in matter of interim stay after notice to either side." 7. Commissioner (Appeals) accepted assessee's contention that ITO would be free to recompute relief under section 80J if Supreme Court was ultimately decide and upheld validity of retrospective amendment. 8. As far as above grounds are concerned, in view of Supreme Court judgment in case of Lohia Machines Ltd. v. Union of India [1985] 152 ITR 308, ITO is directed to recompute section 80J relief in accordance with provision as held to be applicable for year. 9. assessee had claimed weighted deduction under section 35B of A c t on exchange rate difference of Rs. 7,75,211, inland freight on export assignment of Rs. 7,68,173 and packing material consumed exclusively for export to tune of Rs. 25,02,836. As far as first two of three items are concerned, similar claims were made, but disallowed by Tribunal in assessee's case in respect of assessment year 1973-74 in IT Appeal Nos. 184 and 878 (Delhi) of 1977-78 by order dated 21-3-1978. Making said order as basis, and for reasons recorded therein, we rejected assessee's appeal in respect of such claim as untenable under section 35B. 10. However, in respect of packing materials, we are inclined to take different view. In Court before us, assessee has pleaded that it was not entirely packing material but goods were exported in attractive plastic wrappers which were more taken as samples of goods. It was explained to us that tools with wrappers are packed in boxes and if at all, box packing material would be disentitled for weighted deduction relief, rather wrappers, which appeared to us also as attractive samples. case before us is peculiar one and when for revenue it was no disputed that assessee was introducing fresh evidence, we are inclined to direct ITO that to extent assessee spent money for preparing wrappers for putting tools for purpose of exporting them, these would be entitled to weighted deduction, because it was entirely for purpose of development of export markets that assessee prepared beautiful and expensive plastic and colourful wrappers, which were more or less of durable nature and not wrappers as term is generally understood. What was exhibited in Court before us was that set of tools were neatly arranged in plastic containers, which were termed as samples for tools. Considering type of wrappers, we direct that these should be considered as samples and if assessee was in position to separate its cost, same should be given benefit of deduction under section 35B. total claim is in respect of Rs. 25,02,836 but it shall be subject to bifurcation, if necessary, after it is subject to scrutiny of ITO. 11. We like to mention here that Commissioner (Appeals) disallowed claim by observing that packing expenses were incurred in assessment year. As observed above, if part of expenses reached customers as beautiful souvenirs along with goods sold, these should better be considered in category of samples of goods for export. 12. As far as ground No. 3 is concerned, Commissioner (Appeals)'s order reads as follows: "In ground No. 6 appellant had objected to disallowance of claim made before ITO for deduction of surtax liability from total income. This claim has not been found to be admissible by Tribunal in case of Amar Dye Chemicals Ltd. v. ITO in April 1978 issue of Tax Journal (Taxes & Planning) of Bombay. Surtax liability cannot be said to be business expenditure as it is tax on additional return of profits over capital beyond certain proportion and does not arise as expenditure in actual carrying on of business. Such taxes or additional taxes on profits earned are not deductible under Income-tax Act as business expenditure. This claim is, therefore, rejected." 13. From above we notice that Commissioner (Appeals) relied on m r Dye Chemicals Ltd.'s case (supra) to deny assessee's claim. Therefore, we find no occasion to interfere with order on point. assessment is rejected on ground No. 3 also. 14. Shri G. C. Sharma, senior advocate appearing for appellant, sought Bench's permission to withdraw ground Nos. 4 and 4.1. permission having been granted, these grounds are dismissed as withdrawn. 15. As far as additional grounds are concerned, these are identical, but for figures. Therefore, making our order of even date in assessee's own case in IT Appeal Nos. 1143 and 1826 (Delhi) of 1979 as basis we allow assessee's ground No. 1 and rejects ground Nos. 2 and 3. other part of decision in respect of assessment year 1975-76 shall also govern this year's assessee appeal. It may be mentioned here that there is no cross-appeal for revenue. 16. In result, assessee's appeal is partly allowed. *** GEDORE TOOLS (INDIA) v. INCOME TAX OFFICER