Cottage industry exemption denied where brick manufacture used hired labour on a large scale, not family labour and own equipment.

A brick kiln business carried on through hired labour on a large scale was held not to be a cottage industry for the purpose of section 14(3)(i)(b) of the Indian Income-tax Act, 1922. The relevant test was whether the activity was conducted by the artisan himself, ordinarily with family labour and his own equipment, rather than by an employer-employee establishment. On the stated facts, the assessee's brick manufacture did not satisfy that description, so the exemption was not available and the Tribunal's refusal of relief was justified.

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Issues: Whether the assessee's brick kiln business was a cottage industry within the meaning of section 14(3)(i)(b) of the Indian Income-tax Act, 1922.

Analysis: A cottage industry was treated as one carried on by the artisan himself, usually with the help of family labour and his own equipment, rather than an establishment using hired labour in an employer-employee structure. On the facts, the assessee's bricks were manufactured on a large scale through hired labour, and the activity could not be equated with an industry conducted in a cottage or by the family unit.

Conclusion: The assessee's brick kiln business was not a cottage industry within section 14(3)(i)(b), and the Tribunal was justified in denying the claimed exemption.

Ratio Decidendi: An industry employing hired labour on a large scale, and not carried on by the artisan or family unit with their own equipment, is not a cottage industry for the purpose of the exemption.

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