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Section 256, read with section 35B, of the Income-tax Act, 1961 - Reference - Question of fact - Assessee-firm was exporting its manufactured goods through its agents - Commission paid by assessee to its agents qualified for exemption under section 35B(1)(b) as per Board's opinion expressed in Instruction No. 1487, dated 19-10-1982 - ITO dissallowed assessee's claim under section 35B - Tribunal cancelled ITO's order - Whether Tribunal was justified in rejecting revenue's reference application - Held, yes FACTS The assessee-firm was deriving its income from the manufacture of hosiery goods and its export through its agents. During the accounting years relevant to the assessment years 1978-79 and 1979-80 the assessee paid certain commission to its agents on export of goods and claimed weighted deduction under section 35B(1)(b). The ITO disallowed the assessee's claim. On appeal, the Commissioner (Appeals) allowed the assessee's claim. On further appeal, the Tribunal upheld the order of the Commissioner (Appeals) and further rejected the application under section 256(1). On an application under section 256(2): HELD In the instant case, the assessee was admittedly a holder of an Export House Certificate issued by the Chief Controller of Imports and Exports, and therefore, qualified for the exemption under section 35B(1)(b ) in view of the opinion expressed by the Board in paragraph 7 of Instruction No. 1487, dated 19-10-1982. Undisputably the instructions issued by the Board were binding on the revenue and, therefore, it would not be open to it to seek a reference of the question involved. Accordingly, the application under section 256(2) was dismissed. CASES REFERRED TO CIT v. Bhagat Bros. (1987) 165 ITR 660 (Punj. & Har.). Ashok Bhan and Ajay Mittal for the Applicant. G.C. Sharma, D.K. Gupta and S.S. Mahajan for the Respondent. JUDGMENT 1. The assessee is a registered firm and derives its income from the manufacture of hosiery goods and their sale to USSR through its purchase agency Rozno Exports. It claimed weighted deduction under section 35B of the Income-tax Act, 1961 ('the Act') on payment of commission of Rs. 3,10,749.99 to Singh & Co., New Delhi…

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