TMI Blog2015 (9) TMI 709X X X X Extracts X X X X X X X X Extracts X X X X ..... f of payment does not establish that these persons were employed by the assessee, at best, it can be said that since the assessee has already closed down the business in the year 1998, thus, at the relevant time (later stage) only such type of evidence is only possible. The Department has not disputed the payments made to such workers/agency, therefore, we are of the view, that the assessee has substantially complied with the conditions laid down in section 80IA(2)(iv) - Decided in favour of assessee. - IT(SS)A No. 09/Mum/2014 - - - Dated:- 1-5-2015 - Joginder Singh, JM And R. C. Sharma, AM,JJ. For the Appellant : Shri Ajit Kumar Srivastava CIT-DR For the Respondent : Shri Jitendra Jain ORDER Per Joginder Singh (Judici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... containing the name of thirteen persons. A passionate plea was raised that enquiry was made in the year 2013, whereas, the factory itself was closed in the year 1998. It was also explained that the amounts to the workers were paid through the bank. 2.1. For the period 1995-96, the ld. counsel for the assessee fairly agreed that during this period, the assessee firm merely worked for three months and the staff was also short, therefore, in view of this admission, the claim of the assessee for the period 1995-96 is decided against the assessee. 2.2. On the other hand, Shri Ajit Kumar Srivastava, ld. CIT-DR, defended the conclusion arrived at in the assessment order as well as impugned order by contending that when enquiry was made, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utedly made the payments to the contract labour part of which was used for manufacturing process. We further note that there were six casual workers throughout the year with the assessee for which the assessee made the payment. In invoices, issued by M/s SCI International ltd., establishes that the assessee actually made the payments for the entire period to the tune of ₹ 1,47,943/- approximately and the balance amount of ₹ 1,24,879/- was paid to the casual workers. Before the ld. Commissioner of Income Tax (Appeals) also, the assessee filed the brake up of expenditure on casual workers. The basic question is to be adjudicated by us whether the casual labour/workers comes under the definition of workers for the entitlement of be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on all process must be counted. So far as contract labours are concerned, there are divergent views like the Hon'ble Allahabad High Court in R.P. Exports vs CIT 146 taxman 404 and Venus Auto Pvt. Ltd. 321 ITR 504 held that contract labours/job workers cannot be counted for determining the number of workers, whereas, the Hon'ble Gujarat High Court in Prithivi Bhoorchand (2005) 280 ITR 94 (Guj.) held that contract labours must be counted as workers. We are of the view that condition imposed u/s 80IB(2)(iv) of the Act is that assessee to employee ten or more workers in manufacturing process/production of particles or things, therefore, it is immaterial whether workers were employed directly or by hiring from a contractor. Our view is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of no help. During hearing, the ld. counsel drew our attention to the fact that the business was closed down in the year 1998 itself, whereas, notice u/s 158BC was issued on 16/11/1998. Search was conducted on 20/08/1998 u/s 132 of the Act, the original assessment was completed u/s 158 BC on 31/08/2000. The assessee produced the relevant record including the wage register. At the same time, it is also noted that the claimed deduction was denied on the ground that no manufacturing activity was carried out by the assessee. However, the Tribunal vide order dated 16/09/2011 held that the assessee was engaged in manufacturing activity. The issue of employing ten workers was restored to the file of the Assessing Officer, thus, at that stage, it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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