TMI Blog1984 (4) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... been referred to for decision to a Special Bench. It would not, therefore, be proper for us to adjudicate on this issue. The decision of the Special Bench should be the basis for resolution of this dispute. We, therefore, remit this matter back to the ITO so that he can follow the decision of the Tribunal in the Special Bench and decide the matter accordingly. 3. The other point at issue related to the claim for relief under section 80J. This claim was not made by the assessee before the ITO but was made before the IAC at the time of dealing with the matter under section 144B of the Act. The assessee's business started in October 1972. The first year of the assessment, thus, was the year 1975-76, the assessee was dealing in the types of articles ; brass and EPNS ware. The sales of which during this year came to about Rs. 39 lakhs and the readymade garments of the sale value of nearly Rs. 1 1/2 lakhs. 4. Before the ITO in substantiating his claim for relief under section 80J, the assessee pointed out that he purchased cloth in bulk and gave it to workers for getting it converted into garments for export purposes. Likewise he imported brass material in the form of scrap, got it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ugh expert artisans. The assessee took over all the brass materials imported by him, delivered the requisite quantity of material to the artisans, supervised their work and got the manufactured article conform to the samples exported by him. The artisans were paid wages. In respect of each artisan the assessee was maintaining a separate account both with regard to the quantity of material supplied, received, etc., and the wages payable. The artisans were, though not solely employed by him, employed by the assessee for the particular manufacture of goods. To support the case that the manufacture was done by the assessee at his own instance, the detailed process followed is explained. It is pointed out that the raw material purchased by the assessee are handed over to the artisans. All through the material remained the property of the assessee. The workers were only paid wages for the period of employment on the basis of work turned out. The process of manufacturing both in respect of garments as well as the brass material is elaborated and it is pointed out that the assessee was completely involved in the manufacture. In respect of the former the process includes purchase of fabric, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80J(4) are not satisfied. Reference is made in this connection to the decision in the case of CWT v. K. Lakshmi [1983] 142 ITR 656 (Mad.). According to the learned counsel, the provisions of section 2(m) of the Factories Act, 1948, have been virtually reproduced in section 80J. Relying on the decisions of the Supreme Court in State of Kerala v. R.E. D'Souzha AIR 1971 SC 832 and Shankar Balaji Waje v. State of Maharashtra AIR 1962 SC 517, the learned counsel has pointed out that artisans from whom the assessee has taken periodical services do not constitute employees as understood in law and expounded in the Supreme Court decisions. A pre-requisite of the application of section 80J is that the assessee should employ 10 workers at least if power is utilised and 20 workers if power is not utilised. In the present case, apart from the fact that the assessee is a company, even if it is conceded that the assessee is a manufacturer, certainly the assessee does not employ 10 or 20 workers, as the case may be. Even on the assessee's own stand these artisans cannot be said to be his employees and the assessee their employer so as to satisfy the conditions of section 80J(4). The assessee is, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 80J have been enacted. In coming to a conclusion as to whether the assessee is entitled to the benefit of this relief certainly the object should be considered but such consideration should be against the background of the section, the modes of carrying on the business or manufacture, etc. Section 80J deals with several basic requirements which the assessee should satisfy for his being entitled to the benefit thereof. All the expressions used in the section do not also admit of a precise definition. Several concepts are involved in the application of the section and having in view the purpose of the section as pointed out by the Commissioner (Appeals)---these have to be clarified. For example, there is the concept of an 'industrial undertaking' ; 'manufacture of an article' ; 'employment' of certain number of workers ; employment 'in the manufacturing process', etc. There is also an additional concept whether such process should encompass the entire manufacture, should cover the entire previous year and several such unambiguous matters. Thus, where an assessee claims that he is employing certain persons though those persons themselves are workers or artisans on their own the cla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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