TMI Blog2011 (2) TMI 1390X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and circumstances of the case and in law the Ld. CIT(A) erred in considering the contractual workers also for the purpose of fulfillment of the condition of minimum number of workers prescribed under the provisions of section 80IB of the Act. 2. The only issue for consideration in this appeal relates to disallowance of claim for deduction u/s 80IB of ₹ 6,75,41,495/-. The facts of the case stated in brief are that the assessee company during the year under consideration was engaged in the business of manufacturing of essential oil, menthol solution, DMD and Menthol from its industrial undertaking at Jammu. The A.O. in order to examine the claim for deduction u/s 80IB asked the assessee to furnish the details. Since the conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailed chart submitted by the assessee, it was explained that the number of persons engaged in manufacturing process were ranging form 6 12; casual and contracted workers were 8 to 9; 2 persons were assisting for purchase at Barabanki. Further, 3 directors were also engaged in the manufacturing activity. Ld CIT(A) after considering the submissions of the assessee, observed that as per salary register as well as certificate of the contractor clearly indicated that in each of the months starting form July 2005 to March 2006, the contactor provided workers between 8 to 9 every month to the assessee for various purposes like loading of trucks carrying raw material, putting in godowns etc. verification/checking of date of such drums, collecting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... process. He placed reliance on the decision of Hon'ble Supreme Court in the case of J K Cotton Printing Weaving Mills Co. Ltd. 16 STC 563 wherein it has been held that the expression in the manufacturing of goods in Section 8(3)(b) of the Central Sales Tax Act normally encompasses the entire process carried on by the dealer of converting the raw material into finished goods. He further noted that though this decision was rendered in the context of Central Sales Tax Act interpretation can also be put to expression employing 10 or more workers in the manufacturing process . Ld. CIT(A) accordingly held that manufacturing process should be construed as expression of procurement of raw material, processing thereof and generation of fini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urchase of raw material and sale of finished goods form the integral part of manufacturing process and work of labour employed in these processes were workers employed in manufacturing processes within the meaning of Section 80J and 80HH. 4. Ld CIT(A) in view of the above facts was of the opinion that the A.O. was not justified in disallowing the claim of the assessee. He was of the opinion that number of worker engaged on casual basis through contractor as well as person employed by the assessee for purchase of raw material at Barabanki in U.P. were required to be considered. He accordingly allowed the appeal in favour of the assessee. 5. Before us, Ld. CIT DR submitted that for any deduction under Chapter VIA, the requirement of pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us courts would include the process from purchase of raw material till the final product is derived. In the case before us, the assessee has engaged 10 or more workers in the months of August, October November and March. In July, Sep. and December, number of regular employees are less than 10. In addition to regular workers casual/contract workers were engaged 9 each in the months of July and Augusts and 8 each in the other months. In addition to this, 2 persons were regularly employed for purchase of raw material at Barabanki. Therefore the requirement of 10 workers is fulfilled in all the months and therefore, in our considered opinion, Ld. CIT(A) was justified in allowing the claim of the assessee. As per the decision of Hon'ble Su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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