TMI Blog1993 (4) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... act and in law in not allowing to admit the evidence sought to be submitted by the assessee. Thus, the dispute is, on merits, about the allowability of deductions under section 80HH and under section 80-I in a sum of Rs. 78,167 for each. That, in turn, centres round the refusal of the CIT (Appeals) to admit fresh evidence submitted before him. 2. Out of the statutorily laid down conditions for reliefs under sections 80HH and 80-I the main point involved in this case was of employing ten or more persons as workers in manufacturing process. In paras 2 and 3 of the assessment order dated 24-3-1987 the ITO noted that this condition of employing 10 or more workers was not satisfied. He also referred to the reasoning given in the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned Departmental Representative, on the other hand, submitted that the ITO had given full opportunity to prove the claim and on the facts and circumstances of the case the CIT (Appeals) was fully justified in declining to admit fresh evidence. 5. We have very very carefully considered the rival submissions. The arguments put forward by the learned C.A. for the assessee are very tempting and he has of course put them very forcefully. A closer scrutiny, however, reveals that the CIT (Appeals) was right in declining to admit fresh evidence. We may first note here that the previous year relevant to this appeal comprised of calendar year 1983. Vide credit and debit notes dated 1-12-1983 put at pages 1 and 2 of the assessee's paper book, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted by actual payment either by cheque or by cash. The point is that book entries of this type are quite often made even after the end of the relevant previous year. This aspect has remained unexplained. Another aspect which has remained unexplained is whether Farmson has regular activity of supplying workers to the assessee or some other assessees. How come Farmson chose to supply the ten workers to the assessee ? The third aspect is that the labour is supplied only for last three months of the assessee's previous year and there is no whisper even up to the Tribunal level to explain what happened in the first nine months of the relevant previous year. The statutory requirement is in the following terms vide section 80-I(2)(iv) :-- " (i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TR 259 (Bom.)." Then in para 4 the CIT (Appeals) wrote as follows : " 4. The dispute Is regarding the employment of 10 or more workers by the assessee-firm. The ITO came to the conclusion that the firm did not employ more than 10 workers and in this conclusion he excluded the workers employed through labour contractor as contended before me by the assessee. Assessee produced the labour contractor and his statement was recorded. He also gave the names of the workers supplied to the assessee but the ITO did not accept his statement on the ground that he did not keep regular register and that he could not give the addresses of the workers. It is a fact that if the workers employed through the labour contractor are taken Into consideration t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f satisfaction of statutorily laid down condition of employing more than 10 workers had been not only discussed but also investigated. It was the bone of contention before the CIT (Appeals) and the CIT (Appeals) rendered a decision on 23-1-1987. So, the assessee was aware of the importance of this condition much before the assessment order for assessment year 1984-85 was finalised on 24-3-1987. How come, then, the assessee did not consider it necessary to produce relevant papers and evidence before the Assessing Officer in the assessment proceedings for assessment year 1984-85 ? As already indicated, in assessment year 1983-84 the person involved was a labour contractor meaning thereby that it was his job to supply labourers while in the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r relevant to this appeal. Assessee's contention is that business was done up to last year and some expenses on interest and legal and professional fees, etc. were incurred during this year. On our request a copy of the profit and loss account has been furnished which shows on the credit side a sum of Rs. 1,438 "by insurance return". It also shows sales of last year of Rs. 11,35,900 and profit of last year at Rs. 99,020. Thus, in the immediately preceding year there was substantial business and profit. In the previous year relevant to this year there was some credit in the profit and loss account but net amount was the debit. The claim for this deduction deserves to be accepted. We do so. 9. Ground No. 5 objects to the disallowance of Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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