TMI Blog2012 (8) TMI 809X X X X Extracts X X X X X X X X Extracts X X X X ..... ot employed its own employees, yet, the fact is that at every stage the assessee had extracted control over the job work as though they were employees of the assessee. Given the fact that the dyes and the materials were given by the assessee to the job workers, who had merely bestowed their labours, no hesitation in accepting the case of the assessee that it qualify for relief under Section 80IA - in favour of assessee. - TC(A). Nos. 451 of 2006 and TC.(A).Nos. 218 & 219 of 2007 - - - Dated:- 10-8-2012 - Mrs.Justice CHITRA VENKATARAMAN, Mr.Justice K.RAVICHANDRABAABU, JJ. For Appellant : Mr.N.V.Balaji For Respondent : Mr.C.Manisankar COMMON JUDGMENT CHITRA VENKATARAMAN, J. The Revenue has filed the above appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all undertaken by the assessee. Consequently, the assessee contended that it was entitled for deduction under Section 80IA of the Act. The Assessing Officer, however, rejected the contention of the assessee and held that it was not an industrial undertaking manufacturing the grinders. Since assembling was done through labour contractors, there being no manufacturing activity, claim under Section 80IA could not be considered. Referring to the decision reported in 216 ITR 566 C.I.T v. V.O.RAMALINGAM, the Assessing Officer held that the stipulation that the assessee engaged in the manufacture not being satisfied, the claim could not be granted. Aggrieved by this, the assessee went on appeal before the Commissioner of Income Tax (Appeals). Pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6-97, the Tribunal confirmed the relief to the assessee and dismissed the Revenue's appeal. A perusal of the extracted portion of the order of the Tribunal shows that it confirmed the Commissioner of Income Tax (Appeals)'s order by following the decision of the Bombay High Court reported in 196 ITR 813 C.I.T. v. M/S.PENTWALT INDIA LIMITED. Aggrieved by the order of the Tribunal, the Revenue has filed the above appeals before this Court. 4. Learned standing counsel for the Revenue reiterated the contention taken before the Tribunal and submitted that the assessee had not directly engaged itself in the manufacturing of goods, hence, it was not entitled to claim deduction under Section 80IA. He further pointed out that the assessee had not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he contention of the Revenue that the assessee is not involved in the manufacturing of grinders is concerned, we do not find any justifiable ground to accept the plea of the Revenue in the light of the law declared in the decisions cited above. 8. A perusal of the orders of the assessment as well as the order of the Appellate Authority show that the assessee procured raw materials and components. The dyes of the assessee were handed over to the job contractors to make use of the same in the manufacture of grinder parts. The order of the authorities below show that the assessee exercised supervision and control in the manufacturing of the parts done by the job workers on the materials supplied by the assessee in according to the specific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the manufacture or processing of goods, it will be necessary to see whether labourers engaged were under the control of an independent contractor or were controlled by an agent, whose agency distinguished him from that of a servant or employee, and how far the assessee exercised control by engaging such labourers for work, paying wages or remuneration and determining their conditions of service. ................... " 11. Thus this Court held that the question as to whether the assessee is engaged in the manufacturing process or not, has to be seen in the context of the control exercised by the assessee. Going by the facts therein, indicating the supervision and control, this Court held that bleaching of grey yarn and colouring done thro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order and remitted the matters to the High Court for de novo consideration. 13. A reading of the said judgment shows that the reasoning is similar to what is considered in the decision reported in 216 ITR 566 COMMISSIONER OF WEALTH TAX v. RAMALINGAM. Thus, the sum and substance of the law declared by this Court is that the fact that the assessee himself is not personally engaged in the manufacture, would not disentitle the assessee from claiming the relief as one engaged in manufacturing activity, for, so long as the assessee exercises control in the work entrusted to job workers, the assessee would be entitled to the relief under Section 80IA of the Act. Being a deduction provision, taking note of the present day outsourcing of vari ..... X X X X Extracts X X X X X X X X Extracts X X X X
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