Prakash Krishna, J. - (1.) The Income Tax Appellate Tribunal, New Delhi has referred the following question of law under Section 256 (1) of the Income Tax Act, 1961, (hereinafter referred to as the "Act"), for opinion to this Court for the assessment year 1979- 80. "Whether on the facts and in the circumstances of the case the assessee's case fell under the definition of small scale industrial unit as mentioned in the Explanation to Section 35-B (1A) of the Income Tax Act?'
(2.) The assessee/respondent is a registered firm, dealing in the business of export of brass-wares and claimed deduction under Section 35-B (1A) of the Act of Rs. 31,383/- on the allegations that it is a small scale exporter within the meaning of the aforesaid Section and that it maintains a show room for export of articles and it made purchases of goods from various Karkhanedars and that it was carrying on the business as a cottage industry, which is a small scale industry. The Income lax Officer found that the assessee/respondent is neither a small scale industry nor an export house and consequently disallowed the deduction, as claimed by the assessee. In appeal the Commissioner of Income Tax (Appeals) found that the assessee is having machinery like latest assembling and polishing machines worth Rs. 5,234/- and was getting manufacture of brass items under his direct control and supervision from various Karigars and manufacturing process was carried out within the business premises of the assessee firm. It was held by him that the assessee was a small scale industry and satisfied the conditions laid down under Section 35-B (1A) of the Act. This order was confirmed in the appeal by the Tribunal following its order passed in the case of M/s Bhatia Impex (India), Moradabad.
(3.) Heard Sri Shambhu Chopra, learned Standing Counsel for the department and Sri Vikram Gulati, learned counsel for the assessee/respondent.;