R.K.Agrawal, J. - (1.) The Income-tax Appellate Tribunal Delhi, has referred the following three questions of law under Section 256(1) of the Income-tax Act, 1961, hereinafter referred to as "the Act", for the opinion of this court : "1. Whether, on the facts and in the circumstances of the case, the learned Tribunal was legally justified in holding that the assessee was a recognised export house and a small scale exporter who was manufacturing and producing articles and hence was entitled to weighted deduction under Section 35B of the Income-tax Act, 1961, relying merely on the export house certificate dated February 19, 1979, was valid for the period February 19, 1979, to June 30, 1979, only which is after the relevant accounting year ? 2. Whether, on the facts and in the circumstances of the case, the case of the assessee fell under the definition of small scale industrial unit as mentioned in Section 35B(1A) Explanation (d) read with Clause (2) of Explanation below Section 32A(2) of the Income-tax Act ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessee was mainly engaged in the manufacture and processing of articles ?"
(2.) The present reference relates to the assessment year 1979-80. The respondent-assessee is a registered firm. The previous year ended with Kartik Badi 14, Samvat 2035. During the assessment proceedings, the respondent had claimed weighted deduction under Section 35B of the Act. The respondent does not fully manufacture the items under export. The Assessing Officer allowed the deduction under Section 35B of the Act prior to April 1, 1978. However, for the period from April 1, 1978, to the end of October, 1978, he declined to grant deduction under Section 35B of the Act on the ground that the respondent is not a small scale industrial undertaking and the certificate of export house issued by the Government of India, Ministry of Commerce, New Delhi dated February 9, 1979, was effective from February 19, 1979, to June 30, 1979, and therefore could not be taken into consideration.
(3.) The first appeal filed by the respondent on this point did not meet with any success. However, in further appeal the Tribunal had granted weighted deduction under Section 35B for the period April 1, 1978, onwards on the ground that the respondent had filed certificate issued by the U. P. Government registering it as a small scale industrial unit and the export house certificate issued by the Government of India, Ministry of Commerce which is in relation to the year 1978-79. It had held that the evidence on record meets the requirement of law and therefore the respondent was a recognised export house and a small scale exporter entitled to weighted deduction under Section 35B of the Act.;