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TMI Blog2016 (6) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... limit is only 20%. The CIT(A) found that the assessee has employed two sets of workers. The first set of workers are permanent employees and another set of workers and contract employees. The CIT(A) found that the permanent employees are 6 in number and contract employees are 15 in number totalling to 21 employee. This fact is not available before the Assessing Officer. Referring to the old plant and machinery and the new one, the Assessing Officer came to the conclusion that the old plant and machinery was 40% which is more than the permitted limit of 20%. The CIT(A) found that the observation of the Assessing Officer was factually incorrect by saying that the Assessing Officer adopted the opening written down value as on 1.4.2005 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16 - Shri N.R.S. Ganesan, Judicial Member And Shri A. Mohan Alankamony, Accountant Member For the Appellant : Shri P. Radhakrishnan, JCIT For the Respondent : Shri G. Baskar, Advocate ORDER Per N. R. S. Ganesan, Judicial Member Both the appeals of the Revenue are directed against the common order of the Commissioner of Income-tax (Appeals)-6, Chennai, dated 3.3.2015 for assessment years 2006-07 and 2007-08. Since common issue arises for consideration in both the appeals, we heard them together and disposing of the same by this common order. 2. Shri P. Radhakrishnan, ld. Departmental Representative submitted that the assessee claimed deduction u/s 80IB. The Assessing Officer found that the fixed assets schedule sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... various chemicals at various proportions. The plant and machinery shown in the balance sheet is nothing but a testing machine. For mixing the chemicals at various proportions, the testing machine has no role to play. According to the ld. DR, testing process is different from manufacturing process. The plant and machinery in the assessee s case does only testing process, therefore, it has to be construed that the assessee is doing the activity without the aid of power hence, the assessee has to necessarily employ not less than 20 workers for claiming deduction u/s 80IB of the Act. 3. Referring to the assessment order, the ld. DR submitted that the Assessing Officer examined the number of persons employed by the assessee for various month ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the beginning of the assessment year as on 1.4.2005 was at ₹ 8,85,699/-. The addition made during the year under consideration was to the extent of ₹ 13,89,140/-. The opening balance of the plant and machinery to the extent of ₹ 8,85,699/- was not the pre-used plant and machinery. It was the plant and machinery purchased in the earlier assessment year by the new industrial undertaking. The ld. Counsel further submitted that the assessee has employed 6 permanent employees and 15 employees on contract basis. Therefore, the Assessing Officer is not justified in saying that the assessee has employed only less than 10 employees. The CIT(A), after considering the number of persons employed by the assessee and the plant and mac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the conclusion that contract workers sourced through labour contractors are also to be considered as workers for the purpose of deduction u/s 80IB of the Act. Referring to the old plant and machinery and the new one, the Assessing Officer came to the conclusion that the old plant and machinery was 40% which is more than the permitted limit of 20%. The CIT(A) found that the observation of the Assessing Officer was factually incorrect by saying that the Assessing Officer adopted the opening written down value as on 1.4.2005 and compared with the addition of plant and machinery made during the financial year 2005-06. The Assessing Officer came to the conclusion that the new machinery claimed to be purchased by the assessee is only a storag ..... X X X X Extracts X X X X X X X X Extracts X X X X
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