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TMI Blog1993 (6) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus, he held that the deduction granted under section 80-I to the assessee has caused loss of revenue and therefore, it is prejudicial and erroneous. This is the only material ground agitated before us by the contending parties. 4. The brief facts of the case are as under : 4.1 The assessee carries on his business activity without the aid of power but has employed more than 20 persons as labourers in all these years. These labourers are employed on contract basis from M/s. Ambica Screen Printing Contractor. The stand of the assessee is that he was employing more than 20 workers in all the years under consideration whereas the department's stand is that the assessee did not employ more than 20 workers so as to claim benefit of section 80-I. The claim of the assessee was negatived by the learned CIT on the ground that section 80-I(2)(iv) requires that in case of an industrial undertaking which manufactures or produces articles or things should employ 20 or more workers in the manufacturing process, and there should be an employer-employee relationship between the assessee and the workers working for him and since in the instant case of the assessee, assessee was obtaining labou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for whom or on whose behalf any contract labour is engaged in any establishment. An employer in relation to other labour is the person who has the ultimate control over the affairs of any establishment or has a substantial interest in the control of the affairs of any establishment". The learned counsel further brought to our notice the judgment of the Hon'ble Supreme Court in the case of Husainbhai v. Alath Factory Tezhilali Union 1978 SCC (L S) 506 in which Justice Krishna Iyer held that, 'the true test is where a worker or group of workers labours to produce goods or services and these goods or services are for the business of another, that other is, in fact, the employer. He has economic control over the workers' subsistence, skill, and continued employment. If he, for any reason, chokes off, the worker is, virtually, laid off'. 5.2 The learned counsel further contended that the contractor supplies the labourers. The labour is engaged by the assessee in his premises in furtherance of his business interest. The assessee supervises and controls the labourers. In case of an accident, the assessee is responsible to the labourers, and not the contractor. The learned counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... employer by one pretext or the other. So also in the case of Hussainbhai the decision was rendered on the basis of the peculiar facts, existed before the Court in that case and no general law has been laid down by the Hon'ble Supreme Court. This point is clear from the observation of the Court which runs as under : " The presence of intermediate contractors with whom alone the workers have immediate or direct relationship ex contract is of no consequence, when on lifting the veil or looking at the conspectus of factors governing employment, the naked truth is discerned, and especially since it is one of the myriad devices resorted to by managements to avoid the responsibility when labour legislation casts welfare obligations on the real employer based on Arts. 32, 38, 42, 43 and 43A. " 7. We have heard both the parties at great length. The word 'worker' is defined in the Factories Act, 1948 as under : " 'worker' means a person (employed, directly or by or through any agency (including a contractor with or without the knowledge of the principal employer, whether for remuneration or not), in any manufacturing process, or in cleaning any part of the machinery or premises used fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) In respect of employees employed by or through a contractor, the contractor shall recover the contribution payable by such employee (in this scheme referred to as the member's contribution and shall pay to the principal employer the amount of member's contribution so deducted together with an equal amount of contribution (in this scheme referred to as the employer's contribution) and also administrative charges. " Before going through the definitions given in various Acts. we will deal with section 80-I(2)(iv). This is a provision in section 80-I which gives certain benefits to certain assessees. Therefore, it is well settled principle of the interpretation that such provision should not be interpreted so narrowly to deprive the benefit extended by the Legislature to the assessee. 8. In this case. it cannot be disputed that the industrial undertaking employ more than 20 workers. But the question is, whether the assessee is entitled for the benefit of section 80-I(2)(iv), for the reason that he employed the workers through a contractor ? Whether such employment amounts to employment in real term ? In the case of Hussainbhai the Hon'ble Mr. Justice Krishna Iyer speaking for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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