GOVINDA BHAT, CJ. ( 1 ) THE Income Tax Appellate Tribunal, Bangalore Bench has stated a case and referred for the opinion of this Court the following question of law. " Whether, on the facts and in the circumstances Off the case, the Tribunal was right in holding that the assessee was not entitled to the Export markets Development Allowance under S. 35b of the Income Tax Act, 1961, in respect of the freight paid of Rs. 78,762 or any part thereof?" ( 2 ) THE assossee is a registered firm carrying on business in Mangalore. It exports cashewnut kernel and cashew shell oil, to foreign countries particularly the United States of America. The year ending 31-8-1968 is the previous year for the assessment year 1969-70. See. 35b of the Income Tax Act 1961, (hereinafter called the Act), was inserted in the Act by the Finance Act 1968, with effect from April 1, 1968, with the object of providing incantives to exporters of goods and services outside India The section allows a deduction of a sum equal to one and one-third times the amount of revenue expenditure incurred during the previous year for the promotion of export trade. The admissibility of the aliqwance is irrespective of the question whether the assesses has exported any goods during the relevant year or whether he has earned any profits out of exports. The marginal heading given to the section is 'export markets Development Allowance'. ( 3 ) THE assessee became entitled to claim Export Markets Development allowance under Sec. 35b of the, Act. Before the Income Tax Officer it claimed a sum of Rs. 91. 623 as the expenditure incurred on which allowance under S. 35b has to be allpwed. Of the said sum, a sum of Rs. 78,762 represented freight charges paid on the export of cashewnut kernel and cashewnut shell oil outside India. Out of the said sum of Rs. 78,762, a sum of Rs. 25,369-40p, was freight in Indian currency paid in India and the balance amount was paid outside India in USA Dollars. ( 4 ) THE Income Tax Officer disallowed the said claim as sub-clause (iii) of s. 35b (1) (b) of the Act, as substituted with retrospective effect, altogether excluded any laxpenditure incurred on the carriage of goods to their destination outside India or the insurance of such goods while in transit. ( 4 ) THE Income Tax Officer disallowed the said claim as sub-clause (iii) of s. 35b (1) (b) of the Act, as substituted with retrospective effect, altogether excluded any laxpenditure incurred on the carriage of goods to their destination outside India or the insurance of such goods while in transit. In the view of the ITO, the' said claim also did not fall under sub-clause (viii) either. According to him, the expenditure contemplated under sub- clause (viii) was only such expenditure on activities carried on outside india for the development of export markets on long term basis. ( 5 ) IN the appeal preferred before the Appellate Asst Commr, the assessee conceded that the sum of Rs. 12,861 representing the shipping charges incurred in India was not entitiled to the allowance under S. 35b. The appellate Asst Commr agreed with the ITO that the claim cannot be allowed either under sub-cl (iii) or under sub-cl (viii) of S. 35b (1) (b), the assesses went up in second appeal before the Income Tax Appellate tribunal, Bangalore Bench. While agreeing with the contention of the assessee that it satisfied all the conditions laid down in S. 35b (1), viz, that the expenditure claimed was not in the nature of capital expenditure or personal expanses of the assesses and it has been incurred after the 29th day of Feb, 1968, and that the assesses is a domestic company, the Tribunal held that the claim has to be disallowed under sub-clause (iii) as it expressly excluded from its purview any expenditure on the carriage of goods to their destination outside India or on the insurance of such goods while in transit and that the claim also does not fall under sub-cl (viii) as expenditure contemplated thereunder is expenditure not in the execution of the contract itself but expenditure incidental to or connected with the execution of the contract. Accordingly, it dismissed the asscssee's appeal. Accordingly, it dismissed the asscssee's appeal. Sri T. V. Viswanatha Iyer, learnedl Counsel for the assesses, submitted that the assessee admittedly satisfied all the conditions laid down in sub- sec (1) (b) of S. 35b for the entitlement of Export Markets Development allowance; that each head of expenditure listed under sub- clause (i) to (viii) are distinct and separate heads on which the exporter is entitled to the special deduction allowed under Section 35b, and therefore, each sub-clause should be read distinctively; that when so read, if the assessee's claim could come under sub-clause (viii), the fact that the parliament has chosen to exclude such expenditure from the, scope of sub- clause (iii) ought not to weigh with the Court in the matter of the interpretation of sub-clause (viii) and that if the claim actually falls under the said sub-clause, the assessee ought to be allowed the allowance claimed The learned Counsel argued that the assessee as an exporter of goods to foreign countries had entrusted the carriage of the goods to carriers, that the carrier acted as the assessee's agent, that the title to the goods remained with the assesses until the Bills of Exchange with other shipping documents were presented to the foreign buyers or their agents for payment and that the carriage of goods across the seas to foreign destinations by the agent of the assesce is an activity of performance of service in connection with the execution of the contracts, for supply of goods outside India. As an illustration, Sri Viswanatha Iyer gave the case of departmental stores in foreign countries delivering the goods sold at the residence of the customers and that such delivery constitutes an activity of services by the sellers. Learned Counsel argued on that analogy that the assessee undertook the performance of the service of delivery of its goods at the foreign destinations which is performance of service in connection with the execution of the contracts for supply of goods and therefore, tha assessee's claim clearly falls under sub-clause (viii ). ( 6 ) THE question for decision is whether the activities performed by the assessee in the matter of shipment of the goods at Indian. ( 6 ) THE question for decision is whether the activities performed by the assessee in the matter of shipment of the goods at Indian. Ports to foreigu destinations, obtaining Bills of Lading, payment of freight, whether in indian currency or foreign currencies, preparation of Bills of Exchange and presentation of the Bills with the necessary shipping documents to the foreign buyers or their agents for payment, constitute 'performance of service in connection with or incidental to' the execution of the contracts for supply of cashewnut kerned or cashew shell oil outside India. Sec. 35b as amended by Act 19 of 1970 reads :" 35b (1) (a ). Export Market Development Allowance-Where an asscssee, being a domestie company or a person (other than a cempany) who is resident in India, has incurred after the 29th day of Feb 1968, whether directly or in association with any other person, any expenditure (not being in the nature of capital expenditure or personal expenses of the assrssee) referred to in clause (b), he shall, subject to the provisions of this section, be allowed a deduction of a sum equal to one and one-third times the amount of such expenditure incurred during the previous year. (b) The expenditure referred to in clause (a) is that incurred wholly and exclusively on- (i) advertisement or publicity outside India in respect of the goods, services or facilities which the assesses dsials in or provides in the course of his business; (ii) obtaining information regarding markets outside India for such goods, services or facilities; (iii) distribution, supply or provision outside India of such goods, services or facilities, 'not being expenditure incurred in India in connection therewith or expenditure (wherever incurred) on the carriage of such goods to their destination outside India or on the insurance of such goods while in transit'; (iv) maintenance outside India of a branch, office or agency for the promotion of the sale outside India of such goods, services or facilities; (v) preparation and submission of tenders for the supply or provision outside India of such goods, services or facilities and activities incidental thereto; (vi) furnishing to a person outside India samples or technical information for the promotion of the sale of such goods, services or facilities; (vii) travelling outside India for the promotion of the sale outside india of such goods services or facilities, including travelling outward from, and return to India; (viii) performance of services outside India in connection with, or incidental to the execution of any contract fox the supply outside india of such goods, services or facilities; (ix) such other activities for the promotion of the sale outside india of such goods, services or facilities as may be prescribed. * * * * * note:-The clause 'not being expenditure incurred in India in connection therewith or expenditure (wharever incurred) on the carriage of such goods to their destination outside India or on the insurance of such goods while in transit' shown within the inverted commas in sub-clause (iii)of sub-sec (1) (b) of S. 35b was added retrospectively by Section 8 of Act 19 of 1970. " ( 7 ) IN view of the amendment nstrespectively made to sub-clause (iii), Sri viswanatha Iyer did not contend that the assessee's claim falls under the said sub-clause. His case was that the claim falls under sub-clause (viii), The view of the Tribunal was that the acts of the assesses in shipping the goods are essential parts in the execution of the contract itself and they are not acts performed in connection with or incidental to the same. His case was that the claim falls under sub-clause (viii), The view of the Tribunal was that the acts of the assesses in shipping the goods are essential parts in the execution of the contract itself and they are not acts performed in connection with or incidental to the same. ( 8 ) IN our opinion, what Js contemplated by sub-cluase (viii) is the rendering of after-sales service by assessees marketing their goods outside India. It is common knowledge that manufacturers back up their sales with after-sales service and for that purpose provide a network of service centres or Authorised dealers service stations. To a sale they attach a service policy which entitles the buyer to free warranty service for the period of warranty and oven after the expiry of the warranty period, service by expert technicians employed by the manufacturers. To give an illustration, the wellknown manufacturers of Kirloskar Engines , say in their advertisements for their engines that their engines have the backing of a country-wide service network of distributors to deliver to their customers genuine spare parts and render the after-sales-service. The remington Company which manufactures typewriters and electric shavers issues service policies when it sells typewriters or electric shavers manufaclured by it. ( 9 ) THE Company has Remington Factory Service Centres and authorised dealers service stations all over the world. These service stations provide free servicing during the warranty period, and thereafter, supply genuine spans parts, and also service at the lowest possible cost. This is the pattern of trade today. Manufacturers of goods, particularly, light engineering goods, back up their sales with after-sales-service. Indian exporters of such goods to countries outside India can capture markets only if they provide after-sales-service for which they may have to set up factory service oentres or authorised dealers service stations. Exporters have necessarily to incur expenditure in providing after-sales-service in outside countries. It is such expenditure that is covered by sub-clause (viii ). ( 10 ) THE words 'in connection with' or 'incidental to' in sub-clause (viii) have to be given effect to. The word 'incidental' has the same meaning as 'ancillary'. Stroud's Judicial Dictionary (Third Edn, Vol. 1, at page 135) says:" A work is 'ancillary or incidental' to a trade or business when it is not necessary thereto or a primary part thereof. . . . . . The word 'incidental' has the same meaning as 'ancillary'. Stroud's Judicial Dictionary (Third Edn, Vol. 1, at page 135) says:" A work is 'ancillary or incidental' to a trade or business when it is not necessary thereto or a primary part thereof. . . . . . "the decision of the Court of Appeal in Pearce v. London and South Western railway, (1900) 2 QB. 100. has been relied on. The word 'connect' means to join or attach. Therefora, the words 'connected with' cannot take in the antecedent acts which are necessary or primary part in the execution of the contract or sals or supply of goods outside India. ( 11 ) THE assessee's contracts were CIF Contracts under which it had to ship the goods at Indian Ports to foreign destinations. The loading of goods on board the ships at Indian Ports, obtaining Bills of Lading, payment of freight and presentation of the bills of exchange with the shipping documents to the foreign buyers or their agemts, are all necessary acts done in the execution of the contracts for supply of goods outside India. It is not the caae of the assessee that it has rendered any after-sales-service in respect of the goods supplied outside India. Therefore, the view taken by the Tribunal, in our judgment, is right. Accordingly, we answer the question referred in the affirmative and against the assessee. Since the assessee would have been entitled to the allowance claimed but for the amendment of sub-clause (iii) retrospectively, we direct the parties to bear their own costs in this reference. Ordered accordingly. --- *** --- .