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Assessment of disallowance under section 80-I for deduction made by the assessee. Analysis: The appeal was filed against the order of the CIT(A) for assessment year 1998-99, challenging the disallowance of Rs. 29,63,523 made by the Assessing Officer under section 80-I. The assessee, an individual engaged in manufacturing rubber hose pipes, operated an industrial undertaking in a notified backward area. A survey was conducted to verify the claim for deduction under section 80-I, during which statements were recorded from employees and other individuals. The Assessing Officer concluded that the assessee failed to meet the conditions for the deduction, specifically regarding the employment of 10 or more workers. The assessee provided a list of laborers and their verification, along with an affidavit stating that the initial statement was made under duress. Despite the submissions, both the Assessing Officer and the CIT(A) upheld the disallowance. In the appeal before the ITAT, the assessee submitted various documents and relied on case laws to support the claim for deduction under section 80-I. The Revenue contested the claim based on the statement of an employee, Lalchand Tiwari, and other materials found during the survey. The ITAT analyzed the provisions of section 80-I(2)(iv) which require the employment of 10 or more workers in a manufacturing process carried on with power. The ITAT noted that the attendance register showed the presence of 10 or more workers, and statements of workers along with signed vouchers supported their employment. The ITAT also highlighted that the wages of workers were not disputed by the Assessing Officer. The ITAT emphasized that the statement of Lalchand Tiwari, which was the main basis for disallowance, was clarified through an affidavit, and it should not be ignored without due process. Referring to relevant case laws, the ITAT concluded that the assessee had met the conditions for deduction under section 80-I and directed the Assessing Officer to grant the relief. In the final decision, the ITAT allowed the appeal, setting aside the findings of the lower authorities and directing the Assessing Officer to grant the deduction under section 80-I.
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