TMI Blog2006 (8) TMI 446X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of the assessee was selected for limited scrutiny under section 143(2)( ii ) of the Act and finally the assessment was completed on 16-12-2002 by determining the total income at Rs. 64,220 after allowing deduction of Rs. 2,48,652 under section 80-IB. The assessment record was examined by the learned CIT who, after examining the record, was of the view that the Assessing Officer failed to make proper enquiries in respect of the claim of the assessee under section 80-IB. Accordingly, he assumed jurisdiction under section 263 by issuing show-cause notice dated 2-5-2003. After considering the reply of the assessee, the learned CIT posed two questions - ( i ) whether, the assessee carried on the manufacturing process with the aid of power or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... employed in the manufacturing process. Accordingly, the order of the Assessing Officer was partially set aside and the matter was restored to his file for fresh adjudication of the matter under section 80-IB. Aggrieved by the same, the assessee is in appeal before the Tribunal. 3. The learned counsel for the assessee Mr. Jain, has not challenged the assumption of jurisdiction by the learned CIT under section 263. Thus, ground No. 1 raised by the assessee is dismissed as "not pressed". 4. On merit, he tried to argue that manufacturing process was carried on by the assessee with the aid of power by submitting that some of the processes involved consumption of electricity. When the Bench asked to provide the details of consumption of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sual workers are taken into consideration, then the condition prescribed under section 80-IB would stand satisfied. On the other hand, the learned D.R. has relied on the order of the learned CIT. In addition, it was further submitted by him that even assuming that casual workers are to be taken into consideration, then the matter should still go to the Assessing Officer for necessary verification. 6. Rival submissions of the parties have been considered carefully. We have gone through the relevant provisions of section 80-IB. Certain conditions are provided in sub-section (2) which must be fulfilled before claiming the deduction. One of the conditions provided in clause 4 is that, where the industrial undertaking manufactures or produce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase, the ITO found that the assessee employed only 7 workers in its manufacturing process. In addition, there was a labour supervisor, who, according to ITO, could not be considered to be employed in the manufacturing process. Thus, the claim of the assessee was disallowed and the order of the Assessing Officer was upheld by the First Appellate Authority. On further appeal, it was contended on behalf of the assessee before the Tribunal that it was sufficient if 10 or more workers had been employed by the new undertaking at same point of time in the course of the year. Since on some days in the assessment year 10 workers were employed, it was held by the Tribunal that the requirement of section 84(2)( iv ) was complied with and, therefore, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undertaking employs less than ten regular workers, it cannot be heard to say that on any particular day it wanted to employ additional casual workers to enhance the figure to ten or more, but that it could not do so by reason of non-availability of casual labourers. If it chooses to have less than ten regular workers on its muster roll, it runs the risk of not satisfying the requirement on such days on which the necessary number of casual workers is not available." The above observations of the Hon ble Bombay High Court clearly show that casual workers can be taken into consideration for the purpose of ascertaining the number of workers employed in the manufacturing process. Thus, this judgment rather helps the assessee. In view of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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