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TMI Blog2005 (8) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... scribed in section 35B(1A) as amended by the Finance Act, 1978 and was entitled to weighted deduction under section 32A? Whether the Tribunal was justified in dismissing the Department's second appeal on the issue of weighted deduction under section 32A when the Tribunal itself has allowed department's reference application under section 256(1) in the case of United Trading Corporation, Moradabad for the assessment year 1979-80 (C.A. No. 1493/Del/of 1983, dated June 18, 1984)?" The brief facts of the case are as follows: The assessee/opposite party (hereinafter referred to as "the assessee") was an exporter of brassware. The assessment year involved is 1979-80. The assessee claimed weighted deduction under section 35B(1A) as inserted by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us on behalf of the assessee that the 'koramal' which was received from the 'karkhanedars' was in pieces which had to be welded and thereafter soldered, engraved, lacquered and polished, etc., in the assessee's premises where there were workmen employed under the assessee's control. The assessee, therefore, satisfied the requirements of 'small scale exporter' and 'small scale industrial unit' by the Directorate of Industries, Government of U.P. in respect of brassware. We are also supported in the view we are taking by the earlier decisions of the Appellate Tribunal in the cases of F.A.R. Brass Products, Prince Road, Moradabad (vide order dated August 0, 1983 (sic) in I.T.A. Nos. 1151 and 1152/Del/83), order dated November 12, 1980, in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nit registered by the Directorate of Industries, Government of U.P., in respect of brassware and the balance-sheet shows machinery worth Rs. 3,891.48 under the head "Assets" and it was further found that the assessee after purchasing the "koramal" from "karkhanedars" in pieces has done further processing in the form of welding, soldering, engraving, lacquering and polishing, etc. We have gone through the order of the Tribunal and the submissions of learned counsel for the parties and given our anxious consideration. Section 35B(1A), Explanation (d), read with clause (2) of the Explanation below sub-section (2) of section 32A reads as follows: "(1A) Notwithstanding anything contained in sub-section (1), no deduction under this section shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of section 32A reads as follows:- "(2) an industrial undertaking shall be deemed to be a small scale industrial undertaking, if the aggregate value of the machinery and plant (other than tools, jigs, dies and moulds) installed, as on the last day of the previous year, for the purposes of the business of the undertaking does not exceed,- (i) in a case where the previous year ends before the 1st day of August, 1980, ten lakh rupees; (ii) in a case where the previous year ends after the 31st day of July, 1980, but before the 18th day of March, 1985, twenty lakh rupees; and (iii) in a case where the previous year ends after the 17th day of March, 1985, thirty-five lakh rupees, and for this purpose the value of any machinery or plant shall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tivity or effort". It has been further held by the apex court in CIT v. N.C. Budharaja and Co. [1993] 204 ITR 412 that the word "production" is much wider than the word "manufacture". It was said: "The word 'production' has a wider connotation than the word 'manufacture'. While every manufacture can be characterised as production, every production need not amount to manufacture.... The word 'production' or 'produce' when used in juxtaposition with the word 'manufacture' takes in bring into existence new goods by a process which may or may not amount to manufacture. It also takes in all the by-products, intermediate products and residual products which emerge in the course of manufacture of goods." In the case of CIT v. Sesa Goa Ltd. [200 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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