jUDGMENT

Dalveer Bhandari, J.

1. This appeal is directed against the judgment dated 18th January, 2000 passed in ITR No. 10 of 1996 by the High Court of Kerala at Ernakulam.

2. The short question which arises for adjudication by this court is whether the respondent assessee who is engaged in purchase of different qualities of tea and blending the same for the purpose of export is entitled to weighted deduction under section 35B (1A) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) in respect of expenditure incurred for its export for the assessment year 1979-80.

3. Brief facts which are necessary to dispose of this appeal are as under:

The assessee is a registered firm engaged in the business of export of tea. The respondent assessee purchases tea of diverse grades and brands and blends the same by mixing different kinds of tea. In this appeal, we are called upon to examine whether the business activity of the respondent assessee falls within the ambit of production, manufacturing or processing? The respondent assessee would be entitled to weighted deduction under section 35B(1A) of the Act in case the goods exported were manufactured or produced in small scale i