This is appeal by assessee. assessee is limited company and previous year, relevant to asst. yr. 1980-81 under appeal, ended on 31st Dec., 1979. assessee had claimed export market development allowance under s. 35B of IT Act, 1961 in sum of Rs. 10,13,545 being 1/3rd of total expenditure of Rs. 30,40,634. ITO had allowed weighted deduction on sum of Rs. 7,97,025. Weighted deduction at appropriate rate was not allowed on local commission of Rs. 3,13,602 on exhibition expenses of Rs. 1,07,626 and on quota fees of Rs. 1,89,638. assessee carried matter in appeal before CIT (A) unsuccessfully. grounds of appeal before us may be stated briefly as follows: "The ld. CIT (A) and ITO failed to appreciate that appellant had paid commission to local parties for obtaining information regarding market outside India for export of appellant good which clearly falls under sub-cl. (ii) of s. 35B(1)(b) of Act. Further, in order to qualify for weighted deduction under s. 35B(1) (b) of Act, expenditure need not be incurred outside India except that falling under sub-cl. (iii) of said section. ITO erred in not allowing weighted deduction in respect of Exhibition expenses of Rs. 1,07,626. CIT (A) as well as ITO erred in not allowing weighted deduction in respect of quota fees for exports on ground that same was anterior to exports". Shri V.H. Patil for assessee urged tha commission was paid to local parties in connection with export trade and ITO had allowed only foreign commission paid and not local commission. commission paid to local parties is covered by sub-cl. (ii) of s. 35B(1)(b) of Act and therefore weighted deduction ought to be allowed. As for weighted deduction in respect of exhibition expenses, counsel explained that main purpose of participation in Silver Tex Fair organised by Texprocil was to boost exports and fair was organised to promote export of Indian textiles. Overseas buyers were invited and export order worth Rs. 25 crores were book on spot, and therefore expenditure on exhibition was in nature of advertising and publicity outside India. As regards quota fees paid for exports, it was his plea that fees were incidental to exports, as it would not be possible to export their goods without obtaining quota from Cotton Textile Export Promotion Council and therefore, weighted deduction ought to be allowed. He relied on decisions in case of Mettur Beardsell vs. ITO (1985) 21 TTJ (Mad) 472: (1985) 11 ITD 631 (Mad). In case of J. Hemchand & Co. vs. ITO (Second) (1982) 1 SOT 150 (Bom) (SB), in case of CIT vs. Eldee Wire Ropes Ltd. 1978 CTR (Bom) 296: (1978) 114 ITR 485 (Bom) and in case of Universal Ferro and Allied Chemicals Ltd. & Anr. vs. P.G.K. Warrier & Ors. (1983) 37 CTR (Bom) 208: (1983) 143 ITR 959 (Bom). Shri Tej Prakash for Department supported orders of authorities below. In particular, he relied on decision of Madras High Court in case of CIT vs. Southern Sea Foods P. Ltd. (1982) 31 CTR (Mad) 23: (1983) 140 ITR 855 (Mad), and contended that considering services rendered by parties to whom commission was paid, same was rightly disallowed, for purposes of weighted deduction. As for exhibition expenses, it was his plea that exhibition was held only in India and same could not fall under sub-cl. (i) of s. 35B(1)(b) or in any of sub- clauses thereunder. As regards quota fees, it was his argument that assessee had not paid for any particular service rendered in connection with export promotion and, therefore, same was rightly disallowed. He relied on decision of Madras High Court in case of CIT vs. Southern Sea Foods P. Ltd. (supra) in regard to interpretation of s. 35B of Act and contended that if interpreted in manner laid down in ratio of said decision, none of expenses claimed by assessee would be eligible for weighted deduction. We have considered rival submissions and gone through records. Weighted deduction under s. 35B has been subject matter of litigation for quite long time and leading case on this point is one in case of J. Hemchand & Co. vs. ITO (1982) 1 SOT 150 (Bom) (supra). There are decision s of Bombay High Court on this subject. It has been held by Bombay High Court in case of Eldee Wire Ropes Ltd. (supra), as rightly contended by ld. counsel for assessee, that under s. 35B of IT Act, 1961, where legislature desired to exclude expenditure incurred in India for purpose of giving benefit of deduction to assessee by way of export development allowance, it expressly did so by specifically mentioning such exclusion as in sub-cl. (iii) of s. 34B(1)(b). Where this was not done, expenditure can be incurred by assessee either outside India or in India, but it must pertain to purposes mentioned in various sub-sections of s. 35B, which purposes are indicated as pertaining to various activities outside India. expenditure claimed by assessee have to be examined in light of principles laid down by Tribunal in case of J. Hemchand & Co. (supra) and also Bombay High Court decision cited supra. dispute is about commission paid to local parties. ITO has remarked as follows: "The commission paid to local parties amounts to Rs. 8,59,800. amounts are paid to local parties for booking orders from abroad. Madras High Court has held in case of Southern Sea Foods (P) Ltd. (1983) 140 ITR 855 (Mad) that payment of commission in India for procuring orders from foreign buyers for export is not entitled to weighted deduction. It is of course true that Tribunal has allowed such expenses but aforesaid High Court judgment is precisely on point at issue here and needs to be followed. I may add that ratio of Bombay High Court judgment in Universal Ferro and Allied Chemicals Ltd. (supra) is not accepted by Department and hence I do not allow weighted deduction." Thus, it will be found that ITO did not allowed weighted deduction on commission payment for reason that decision in case of Universal Ferro and Allied Chemicals (supra) has not been accepted by Department. It is seen that commission of Rs. 3,13,601 was paid to 11 parties (page 1 of paper book). local parties are stated to have provided information regarding markets outside India for export of appellant s goods, which resulted in procuring orders and commission was paid to them. Madras High Court decision in case of Southern Sea Foods (P) Ltd. (1983) 140 ITR 855 (Mad) relied on by departmental representative, is not applicable to instant relied on by departmental representative, is not applicable to instant case. In that case, commission was paid only to one party and that too for procuring orders and therefore, High Court came to conclusion that none of sub-clauses of s. 35B(1)(b) applied in assessee s favour. In case before us, commission is stated to have been paid is parties for obtaining information about markets abroad which resulted in procuring orders. Therefore, following ratio of Bombay High Court decision in Universal Ferro and Allied Chemicals, cited supra, and also decision of Special Bench of Tribunal in case of J. Hemchand & Co. (supra), we uphold contention of assessee and set aside order of Commissioner (Appeals). second point of dispute is about rejection of assessee s claim for weighted deduction in respect of exhibition expenses of Rs. 1,07,626. ITO rejected assessee s claim as expenditure was incurred for participation in fair and not by way of any arrangement to specifically export assessee s goods. assessee s contention is that Textile Export Promotion Council. For first time in their history, had arranged Silver Tex Fair at Oberoi Towers Regal Room on 3rd 4th and 5th Dec., 1979. This fair was organised to celebrate Silver Jubillee of Council, trophy distribution for best export performance and to invite foreign buyers to promote export of their members. assessee-company booked two stalls said exhibition and displayed its products. Brouchers and circulars were distributed amongst overseas buyers and visitors of fair. ITO himself has mentioned that more than 150 overseas buyers came from different countries to participate in fair and it is stated by assessee that orders worth about Rs. 25 crores were booked on spot. In case of assessee, its export of immediately following quarter increased and was worth about Rs. 4.59 crores as against total turnover of Rs. 13 crores. Commissioner (A) relying on Madras High Court decision cited supra interpreted that exhibition if held in India would not amount to publicity outside India and sustained disallowance. It is immaterial whether expenditure was incurred in India or elsewhere, as has been laid down by Bombay High Court in case of Eldee Wire Ropes Ltd. (supra), wherein their Lordships have observed that it would appear that where legislature desired to exclude expenditure incurred in India for purpose of giving benefit of weighted deduction to assessee, it expressly did so by specifically mentioning such exclusion in sub-section, for example, sub-cl. (iii) (sic). exhibition expenses do not fall in sub-cl. (iii) (sic). Foreigners attended exhibition and went with knowledge of their products. In other words, their products gained publicity with foreigners. Having regard to rival submissions and material on record, we uphold contention of assessee that exhibition though held in India resulted in publicity outside India and set aside order of commissioner (A) on this point. As regards quota fees paid to Cotton Textile Export Promotion Council, we notice that TEXPROCIL grants quota to members. Service charge is payable to Council and also quota fees. note has been provided in paper book at page 3 as regards quota fees and service charges. On going through same, we notice that amount paid to TEXPROCIL could not be brought under any of sub-clauses of s. 35B(1)(b). Moreover, quota fee is not for any specific service rendered by TEXPROCIL in connection with performance of services outside India in connection with or incidental to execution of any contract, etc. etc. we, therefore, uphold order of Commissioner (A) on this point. In result, appeal is partly allowed. *** NAVNITLAL & CO. v. FIRST INCOME TAX OFFICER