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TMI Blog2011 (11) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... have been fulfilled. - Decision in in the case of Commissioner of Income Tax V/s. Sawyer’s Asia Limited (1979 -TMI - 37005 - BOMBAY High Court) - Decided in favor of assessee. - ITA 5045 OF 2010 - - - Dated:- 15-11-2011 - J.P. Devadhar, J. ORAL JUDGMENT: (Per J.P. Devadhar, J.) 1. The appeal is admitted on the following two substantial questions of law and taken up for final hearing by consent of both the parties. a) Whether the Income Tax Appellate Tribunal was justified in holding that the assessee is engaged in the activity of manufacture or producing an article or thing and, hence, eligible for deduction under Section 80IB of the Income Tax Act, 1961? b) Whether the Tribunal was justified in holding that the workers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue, the Income Tax Appellate Tribunal ( Tribunal for short) confirmed the order of the Commissioner of Income Tax (Appeals) and by a common order dated 5th February 2010 dismissed the appeals filed by the Revenue for assessment years 1999 2000 to 2004 2005. Challenging the aforesaid order, the Revenue has filed independent appeal for each of the respective assessment year. 6. Mr.Kazi, the learned counsel appearing on behalf of the Revenue submitted that from the assessment order it is clear that the assessee has paid labour charges / job work charges to third parties, which clearly establish that the assessee got the goods manufactured from the premises of the job worker on labour contract basis and, therefore, the assessee cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excise duty amounting to Rs.106.97 lakhs and claimed CENVAT credit of Rs.53.73 lakhs; (c) the assessee owned plant and machinery worth Rs.2.32 crores before depreciation and the value of the said plant and machinery after depreciation came to Rs.1.04 crores; (d) the assessee holds SSI certificate from the Department of Industries, Administration of Daman and Diu for manufacturing the plastic goods; (e) the assessee has paid in the assessment year in question electricity charges worth Rs.38.94 lakhs and had also spent Rs.12.01 lakhs towards repairs and maintenance of its machinery. 10. The aforesaid facts, which are uncontroverted, clearly establish that the manufacturing activity was carried out at the factory premises of the assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Section applies to any industrial undertaking which fulfils all the following conditions, namely (i) (ii) (iii) ‑ (iv) in a case where the industrial undertaking manufactures or produces articles or things, the undertaking employs ten or more workers in a manufacturing process carried on with the aid of power, or employs twenty or more workers in a manufacturing process carried on without the aid of power. 13. The expression worker is neither defined under Section 2 of the Act nor under Section 80IB(2)(iv) of the Act. As per Black s Law Dictionary, the expression worker means a person employed to do work for another. Under Section 2(L) of the Factories Act, 1948, the expression worker means a perso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in number. However, where the undertaking employs less than ten regular workers, it cannot be heard to say that on any particular day it wanted to employ additional casual workers to enhance the figure to ten or more, but that it could not do so by reason of non availability of casual labourers. If it chooses to have less than ten regular workers on its muster roll, it runs the risk of not satisfying the requirement on such days on which the necessary number of casual workers is not available.15. In the present case, it is not the case of the Revenue that the total number of workers employed in the manufacturing were less than ten at any point of time during the relevant assessment year. Therefore, when Section 80IB(2)(iv) of the Act mere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh reported in AIR 1957 SC 444, the Allahabad High Court held that where the work is entrusted to karigars / artisans, it is a contract for service and not a contract of service and, therefore, the karigars / artisans to whom the work was entrusted cannot be said to be workers employed by the assessee. In the present case, the finding of fact recorded by the Tribunal is that the assessee had entered into a contract of service with the contractor who supplied workers to the assessee and the said workers worked in the factory of the assessee under the direct control and supervision of the assessee. Therefore, the decision of the Allahabad High Court in the case of R and P Exports (supra) is distinguishable on facts. 17. No doubt that the de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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