Meaning of “Demonstration or dissemination of information on sub”

The meaning of demonstration or dissemination of information on sub under section 35C of the Income Tax Act is not defined in the act itself. But we can take guidance from decisions by various high courts. Here are excerpts of courts orders in which the Hon’ble Income Tax Appellate Tribunal tried to explain the meaning of demonstration or dissemination of information on sub.

Meaning of demonstration or dissemination of information on sub

The phrase ‘demonstration or dissemination of information on sub‘ used in section 35C of the Income Tax Act came up before Hon’ble ITAT-Bombay in First ITO vs. Richardson Hindustan Ltd. [1986] 18 ITD 311 (Bom. – Trib.) and it explained.

Meaning:  Demonstration can be given based on the existing knowledge, even if no research is currently carried on. Hence, demonstration and research are independent activities. The legislature has not allowed weighted deduction on research and has allowed it only on demonstration of or dissemination information. Therefore, the scope of the provisions of section 35c(1)(b)(ii) cannot be enlarged by including expenditure on ‘research’ under the head ‘demonstration’ or ‘dissemination of information.’

Section 35C of Income Tax Act

Agricultural development allowance.

35C. [Omitted by the Direct Tax Laws (Amendment) Act, 1987, as amended by the Direct Tax Laws (Amendment) Act, 1989, w.e.f. 1-4-1989. Original section 35C was inserted by the Finance Act, 1968, w.e.f. 1-4-1968.]

In this article, you can get guidance from high courts on the meaning of demonstration or dissemination of information on sub under section 35C of the Income Tax Act.

Updated up to Finance Act 2021