M. KATJU, J. ( 1 ) THIS is an income-tax reference under Section 256 (1) of the Income-tax Act, 1961, in which the following question has been referred to us for our opinion : "whether, on the facts and in the circumstances of the case, the Tribunal was right in concluding that the counter sales within India, against foreign currency, should be treated as export sales ?" ( 2 ) HEARD learned counsel for the Department. Although the office report shows that on May 29,1985, notice has been served on the assessee, none has appeared on his behalf. ( 3 ) THE assessee-firm deals in jewellery and antiques. It has a show room at Agra where it sells jewellery and antiques to foreigners against foreign currency. The assessee claimed weighted deduction under Section 35b of the Income-tax Act. ( 4 ) SECTION 35b (1) (b) provides for grant of weighted deduction in respect of expenditure incurred wholly and exclusively on- " (i) advertisement or publicity outside India in respect of the goods, services or facilities which the assessee deals 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;" ( 5 ) THE expenditure referred to in Sub-clause (iii) of Section 35b (l) (b) refers to sales outside india and not within India. Hence in our opinion Section 35b is not attracted at all to the sales in question since they are sales made within India. ( 6 ) THE question referred to us therefore is answered in the negative, i. e. , in favour of the department and against the assessee. .