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TMI Blog2012 (8) TMI 453X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the activity of supervising and managing the manufacturing process and therefore, the same are integral part of manufacturing process - assessee has complied with the conditions of employing 10 workers - in favour of assessee. - ITA No. 6439/Mum/2010 - - - Dated:- 29-6-2012 - SHRI G E VEERABHADRAPPA, SHRI VIJAY PAL RAO, JJ. Assessee by Shri Hiro Rai Revenue by Sh C G K Nair ORDER PER VIJAY PAL RAO, JM This appeal by the revenue is directed against the order dated 22.6.2010 of Commissioner of Income Tax(Appeals) for the assessment year 2002 03. 2 The revenue has raised following grounds in this appeal: On the facts and in the circumstances of the case and in Law, the [earned CIT(A) has erred in allowing re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al, vide its order dated 05.06.2008 remanded the matter to the record of the Assessing Officer for reconsideration of fresh evidence filed by the assessee in the shape of affidavits of workers. In the assessment proceedings pursuant to the direction of this Tribunal, the Assessing Officer has recorded the statement of the 2 watchmen and the Manager. However, the Assessing Officer was of the view that the 2 watchmen employed by the assessee cannot be counted as workers and employed in the manufacturing process carried out by the assessee. Accordingly, the Assessing Officer held that the assessee is not eligible for deduction under section 80 IB of I T Act. 3.2 On appeal the Commissioner of Income Tax(Appeals) has allowed the claim of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rders. Thus, the ld AR of the assessee has submitted that for the purpose of section 80 IB, the number of workers include clerk, watchmen, factory manager, accountant etc. He has supported the order of Commissioner of Income Tax(Appeals). The ld AR has also relied upon the decision of the Hon ble Allahabad High Court in case of Commissioner of Income-tax v. Sultan and Sons Rice Mill reported in 272 ITR 181. 5 We have considered the rival contentions as well as relevant material on record. There is no dispute that the assessee has employed 11 persons in the factory including 2 Watchmen, 1 Accountant cum-Factory Manager. Thus, the dispute before us is only on the point whether the Watchmen, Accountant-cum-Factory Manager will be considere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ua industrial undertaking and to grant relief to the assessee. Section 80J(4)(iv) has to be interpreted in the light of other provisions of section 80J. The emphasis under section 80J is on the phrase industrial undertaking manufacturers or produces articles ten or more workers would be employed in the manufacturing process carried on by the industrial undertaking. The words employs ten or more workers in the manufacturing process normally would cover the entire process carried on by the industrial undertaking of converting the raw material into finished goods. The work of ten or more persons employed in the manufacturing process should be integrally connected with the manufacturing of rice. Their work should be reasonably connected wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... finished goods form an integral part of the manufacturing process and the workers and labourers employed in this process are workers employed in the manufacturing process. 6.3 In the case in hand, the watchmen in their statement recorded by the Assessing Officer had stated that they are also performing the duties like packaging, preparing gate pass, maintaining attendance register etc., clearly shows that they are engaged in the activity of manufacturing process carried out by the assessee in the factory. Similarly, the factory manager performing the activity of supervising and managing the manufacturing process and therefore, the same are integral part of manufacturing process. 6.4 The Co-ordinate Bench of this Tribunal, in case of M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the manufacturing process starts from canvassing of orders. So in view of the above decision as rightly contended by the id. Counsel for the assessee for counting the number of workers, the chemists, clerk, watchmen are also to be included. In view of the above two decisions of the Honbie Bombay High Court, we are inclined to allow the claim of the assessee in respect of deduction u/s. 801A. 6.5 We further note that this Tribunal, in case of ACIT vs Ms Richa Chadha reported in 282 ITR (AT) 1 (Mum) has held that casual, temporary or permanent employees are to be considered for the purpose of deduction under section 80 I A. The Commissioner of Income Tax(Appeals) allowed the claim of the assessee by following the order of this Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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