Weighted deduction for export incentives requires proof of manufacture in an assessee-owned small-scale industrial undertaking.

Weighted deduction under section 35B(1A) was denied because the assessee-firm failed to prove that the relevant goods were manufactured or produced in a small-scale industrial undertaking owned by it. The court treated the facts as comparable to an earlier case where production was carried out through labourers paid by work and there was no documentary material establishing a qualifying undertaking. On that basis, the claimed export-related incentive was not allowable.

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Issues: Whether the assessee-firm was a small-scale industrial undertaking entitled to weighted deduction under section 35B(1A) of the Income-tax Act, 1961.

Analysis: The claim for weighted deduction was required to be supported by proof that the goods were produced or manufactured in a small-scale industrial undertaking owned by the assessee. The facts found were treated as similar to those in the earlier decision concerning Dhandia Gems Corporation, where manufacture through labourers paid by work and absence of documentary support for a qualifying undertaking led to denial of the deduction.

Conclusion: The assessee was not entitled to weighted deduction under section 35B(1A) of the Income-tax Act, 1961.

Ratio Decidendi: A deduction claimed for export-related incentives under section 35B(1A) is not allowable unless the assessee proves that the relevant goods were manufactured or produced in a small-scale industrial undertaking owned by it.

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