JUDGMENT BY THE COURT : This is an application under s. 256(1) of the IT Act at the instance of the Revenue and the following question of law has been referred by the Tribunal for answer to this Court : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the activities of the society are in the nature of cottage industry as contemplated in s. 80P(2)(a)(ii) of the IT Act, 1961 and thus, entitled for exemption ?" 2. The brief facts giving rise to this reference are thus : The assessee is a co-operative society acting as the apex society for the primary societies of Weavers. It supplies raw materials and machineries to the primary societies to be supplied to weavers and then purchases the manufactured goods from them to be sold at fair price in the market. In response to notice issued under s. 148 of the IT Act, the assessee filed its return at Nil after claiming exemption under s. 80P of the Act. It was submitted that since the society was engaged in the activities covered by sub-cl. (ii) of cl. (a) of s. 80P(2) of the Act, therefore, the assessee is entitled to deductions admissible in profits and gains of business of a co-operative society engaged in cottage industry. The ITO did not accept such contentions of the assessee and disallowed the deductions under s. 80P(2)(a)(ii) of the Act. Hence, an appeal was preferred before the AAC and the AAC decided the appeal in favour of the assessee. 3. Aggrieved against the order of the AAC, the Revenue preferred on appeal before the Tribunal and the Tribunal affirmed the order of the AAC and confirmed the finding that the assessee is entitled to exemption under s. 80P(2)(a)(ii) of the Act. Hence, the aforesaid question has been referred by the Tribunal at the instance of the Revenue to this Court for answer. 4. We have heard the learned counsel for the parties and perused the records. 5. Hence, the aforesaid question has been referred by the Tribunal at the instance of the Revenue to this Court for answer. 4. We have heard the learned counsel for the parties and perused the records. 5. It is an admitted fact that the Apex Society has produced its bye-laws and it has been pointed out that the primary co-operative societies are working as connecting link and all the machines and materials are provided to this primary co-operative societies and they after preparing the finished goods, passed on these goods to the apex society and the apex society sold it at fair price in the market. There cannot be two opinions of the matter that this industry prepares goods as cottage industry because these goods are prepared at the gross root level. Primarily, the job of the societies is done at their own personal level or the gross root level. Therefore, the benefit has been given treating the apex society which ultimately purchased their goods from the primary society and they are the subsidiary of the apex society. Therefore, there is no hesitation in holding that these primary co-operative societies are engaged in a cottage industry and they are entitled to the benefits as given under s. 80P(2)(a)(ii) of the Act. A similar question came up for consideration before this Court in CIT vs. Chichli Brass Metal Workers Co-op. Society (1978) 114 ITR 720 (MP) , and there also, their Lordships after considering the question, have taken the view that such society will be entitled to the benefits, and in that context, it was held : "The assessee, a co-operative society, which was assessed as an AOP, did not engage any outside labour and the members themselves manufactured bras utensils in the premises of the society by using wooden hammers. There was no material to hold that the members could be said to be employed as workers under the Factories Act, 1948. So the premises of the society cannot be held to be a factory. Even if an activity engaged in by a society was a cottage industry it would not cease to be so simply because the premises in which it was carried on was a factory as defined by the Factories Act. So the premises of the society cannot be held to be a factory. Even if an activity engaged in by a society was a cottage industry it would not cease to be so simply because the premises in which it was carried on was a factory as defined by the Factories Act. Therefore, the assessee-society was engaged in cottage industry and the income from the manufacture and sale of brass utensils was exempt under s. 81(i)(b) of the Act (now incorporated in s. 80P of the Act)." A similar question also came up for consideration before the Madras High Court in CIT vs. T. N. Co-op. Marketing Federation Ltd. (1983) 144 ITR 74 (Mad) and in that case, the assessee-Co-operative society, a federation of primary co-operative societies, purchased fertilisers and sold them to various member societies and not to the actual agriculturists who carried on agricultural operations. The claim of the assessee for exemption from income-tax was negatived by the ITO but upheld by the AAC and the Tribunal. The application of the Revenue for reference of certain questions of law for the opinion of the High Court having been rejected, the Department filed an application to the High Court for directing the Tribunal to state the case and refer the question of law. The Court held that the Tribunal was justified in its view that the benefit of s. 80P of the Act would be available to the assessee and hence, no question of law had arisen out of the order of the Tribunal. 6. The learned counsel for the Revenue has invited our attention to the decision given by the Allahabad High Court in District Co-operative Development Federation Ltd. vs. CIT (1973) 88 ITR 330 (All) and in that case, the question was of a brick kiln and large number of workers were employed in manufacture of bricks and a question arose whether such an industry was a cottage industry or not. In that context, their Lordships held that a cottage industry is one which is carried on by the artisan himself using his own equipment with the help of the members of the family. It is the family unit which provides the labour force. The idea of cottage industry is alien to the idea of industry where hired labour is engaged and the relationship of employer and employees exists. It is the family unit which provides the labour force. The idea of cottage industry is alien to the idea of industry where hired labour is engaged and the relationship of employer and employees exists. It was also held that the assessee was not entitled to the benefits. But, in the present case as pointed out above, the apex society supplied the material to the primary co-operative societies and those primary co-operative societies at the gross root level, prepared the goods and then passed on to the apex society. Therefore, there is link between the primary co-operative societies and the apex society. As a matter of fact, the apex society works as an outlet for getting the better marketability of the goods of the primary societies. As such, this case stands on different footing than that case, i.e., Distt. Co-operative Development Federation Ltd. (supra). In this view of the matter, we are of the opinion that the view taken by the Tribunal is well justified and we answer the aforesaid question in favour of the assessee and against the Revenue.