TMI Blog2010 (3) TMI 897X X X X Extracts X X X X X X X X Extracts X X X X ..... umar for the Appellant. Shaji P. Jacob for the Respondent. ORDER Vijay Pal Rao, Judicial Member. - This appeal by the assessee is directed against the order dated 16-2-2007 of the Commissioner of Income-tax (Appeals), Coimbatore, for the assessment year 2004-05. 2. The assessee has raised various grounds in this appeal. However, the only issue that arises is whether the Commissioner of Income-tax (Appeals) is justified in confirming the denial of claim of deduction under section 80-IB on the ground that the assessee has not complied with clause ( iv ) of sub-section (2) of section 80-IB as the assessee has not employed the requisite number of workers. 3. We have heard the learned authorised representative as well as the learned Departmental representative and considered the relevant records. At the outset, we note that this issue has already been considered and adjudicated by this Tribunal vide order dated 27-11-2009 in the assessee s own case in ITA Nos. 900, 901 and 902/Mds./2009 for the assessment years 2001-02, 2002-03 and 2006-07 in paragraphs 4 to 18 as under : "4. We have heard the rival submissions and have carefully perused the Tribunal order vis- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... site of the customers. When the Tribunal rendered its decision in the assessee-company s own case the "assembling activity" was not treated as a manufacturing/production activity. The facts found by the Tribunal in the assessee-company s own case in the assessment year 2003-04 have to be treated as correct until there is a change. The Tribunal has categorically held in its order relied on by the learned Commissioner of Income-tax (Appeals) that the assessee is assembling wind operated electricity generator. The relevant portion of the Tribunal s order is being extracted verbatim, herein as below : "In view of this, the activity carried on by the assessee is only assembling wind operated electricity generator and erection in the place of the customer and that cannot be construed as manufacturing activity and accordingly relief under section 80-IB cannot be allowed. 5. Regarding the finding that the assessee has not employed more than 10 persons, the assessee has not placed any evidence to controvert the finding of the Assessing Officer. Further the basic condition that the assessee should manufacture or produce any article or thing not being any article or thing specified in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Supreme Court in the case of Vijay Ship Breaking Corpn. v. CIT [2009] 314 ITR 309 has elaborately given the definition of the word "production" as under : "The important test which distinguishes the word production from manufacture is that the word production is wider than the word manufacture . Further, it is true that CIT v. N.C. Budharaja Co. [1993] 204 ITR 412 (SC) the Division Bench has used the word new article . However, what the Division Bench meant was that a distinct article emerges when the process of ship breaking is undertaken. Further, the Legislature has used the words manufacture or production . Therefore, the word production cannot derive its colour from the word manufacture . Further, even according to the dictionary meaning of word production , the word produce is defined as something which is brought forth or yielded either naturally or as a result of effort and work. It is important to note that the word new is not used in the definition of the word produce . The Tribunal in the present case was right in allowing the deduction under sections 80HH and 80-I to the assessee holding that the ship-breaking activity gave rise to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount to "production" but also to "manufacture". 13. We are in agreement with the learned authorised representative that even by following the Tribunal s order supra, the assembling is also now to be held as a manufacturing activity in view of the subsequent decision of the Hon ble High Court. Thus, by following the Tribunal s order on facts, we are of the considered opinion that the interpretation of law as laid down by the Hon ble High Court and the Hon ble Supreme Court brings the assembling activities of the assessee under the definition of "manufacture" and "production". We cannot ignore the subsequent legal position which holds even the assembling activity as a manufacturing activity, rather we are bound to follow the same. The revenue could not successfully controvert the above recent legal position on the subject and the learned Departmental representative only relied on other decisions from which only it could be inferred that if the assessee undertaking has been carrying on manufacturing/production activities, only then it is eligible for such a deduction. We are in agreement with the learned Departmental representative to that extent. Moreover, it is nobody s case ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entative. He has shown us the copies of muster rolls of such employees and has also relied on certain case law in support of his contention. 17. We have carefully treaded through the statement of Shri Mani. He has nowhere stated that except him no other worker was employed by the company. What, in context, he has stated is that he is only the permanent employee at the factory. He has confirmed the activities of assembling of wind mills. Actually section 80-IB(2)( iv ) says that such undertaking should employ ten or more "workers" if this activity is done with the help and aid of power. This section talks of workers and not of employees whether permanent or temporary, etc. The Hon ble Mumbai Bench "D" of the Income-tax Appellate Tribunal in the case of Asstt. CIT v. Ms. Richa Chadha [2005] 96 ITD 325 has held that "All workers whether permanent or casual, employed by the assessee in the manufacturing process as well as in subsidiary activities are to be counted for determining compliance with the requirement of the Act, if ten or more workers were employed for substantial part of the working period of factory, it would be sufficient compliance with the condition". Copies of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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