1984 (12) TMI 122 - AT - Income Tax

Summary

Issues:
1. Whether the assessee employed 10 or more workers in the manufacturing process and fulfilled all conditions under s. 80J(4)(iv).

Detailed Analysis:
The appeal before the Appellate Tribunal ITAT Jaipur involved a dispute regarding the assessee's eligibility for relief under s. 80J for the assessment year 1979-80. The main issue was whether the assessee had employed 10 or more workers in the manufacturing process as required by s. 80J(4)(iv). Initially, the assessee claimed Rs. 9,710 as 80J relief based on a capital employed amount of Rs. 12,94,770. However, in a revised return, the 80J claim was increased to Rs. 96,646. The Income Tax Officer (ITO) requested the assessee to demonstrate compliance with the conditions of s. 80J(4)(iv), which mandated employing a certain number of workers in the manufacturing process.

The assessee provided a detailed list of employees engaged in each month of the relevant accounting year, excluding certain administrative roles like secretary and accountants. The tribunal noted that, except for one month, there were consistently more than 10 workers engaged in the manufacturing process. The definition of a worker under the Factories Act, 1948 was crucial in determining who qualified as a worker engaged in the manufacturing process. The tribunal referenced a previous case where it was held that a minor shortfall in the number of workers for a single month should not disqualify the assessee from claiming relief under s. 80J.

The tribunal emphasized that the definition of a worker under the Factories Act, 1948 should be applied in interpreting the term "worker" in s. 80J(4)(iv) of the Income Tax Act. Rejecting the argument to adopt a dictionary meaning of the term, the tribunal held that the definition from the Factories Act was appropriate. Consequently, the tribunal concluded that the assessee had substantially complied with the provisions of s. 80J(4)(iv) and was entitled to the relief under s. 80J. The appeal was decided in favor of the assessee based on the substantial compliance with the statutory requirements, despite a minor shortfall in the number of workers in one month.