TMI Blog2001 (8) TMI 104X X X X Extracts X X X X X X X X Extracts X X X X ..... d of power as provided under clause (iv) of sub-section (2) of section 80HH and clause (iv) of sub-section (4) of section 80J of the Act?" The assessee carries on the business of manufacturing carborandum. The assessee claimed deductions under sections 80HH and 80J of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), on the ground that it had employed ten or more persons in the manufacturing process. The Income-tax Officer, however disallowed the claim on the ground that the assessee got certain processes done from outsiders on piece-meal basis and that the assessee had not provided regular employment to any person in its manufacturing process. The Assessing Officer observed that mere providing of job work to some persons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of processes or pieces completed but usually they would work during the regular hours for the whole day." The Tribunal then applied the test to find out whether the contract was of service or the contract was for service. The Tribunal came to the conclusion that the assessee had employed ten or more persons and was entitled to get the deductions under sections 80HH and 80J of the Act. At the instance of the Revenue, the Tribunal has, therefore, referred the above quoted question for our decision. Mr. B. B. Naik, learned standing counsel for the Revenue, has submitted that when the work was done by outsiders and on job work basis, they could never be considered to be workers or employees and that, therefore, the Tribunal was not jus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng outside the factory premises of the assessee. In this set of circumstances, when the Tribunal accepted the case of the assessee that the work was being done within the factory premises, there is no warrant for accepting the submission made by learned counsel for the Revenue that the work was being physically done outside the factory premises. Learned counsel for the Revenue, however, persisted that even if the work was being done within the factory premises, since the payment was being made on job work basis or piece rate basis, the persons doing the work would not be considered as employees. The contention cannot be accepted. As held by the apex court in Harish Chandra Bajpai v. Triloki Singh, AIR 1957 SC 444, a contract of employ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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