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| DATE: | November 18, 2011 (Date of publication) |
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| Click here to download the judgement (jyoti_plastic_80IB_workers.pdf) |
For s. 80-IB “workers” need not be “employees”
The assesee was engaged in the manufacture of goods by using job workers; its total number of permanent employees was less than ten. The department relied on Venus Auto Pvt Ltd vs. CIT 321 ITR 504 (All) and claimed that the non-employment of at least 10 workers was in breach of s. 80IB(2)(iv) and deduction u/s 80IB was not admissible. This was reversed by the Tribunal. On appeal by the department, HELD dismissing the appeal:
S. 80IB(2)(iv)(iii) provides that an industrial undertaking must “employ” ten or more workers in a manufacturing process carried on with the aid of power. The expression ‘worker’ which is not defined in the Act means any person employed by the assessee directly or by or through any agency (including a contractor). What is relevant is the employment of ten or more workers and not the mode and the manner of employment. The fact that the employer – employee relationship between the workers employed by the assessee differs cannot be a ground to deny deduction u/s 80IB (Sawyer’s Asia Ltd 122 ITR 259 (Bom) followed; Venus Auto Private Limited 321 ITR 504 (All) dissented from).
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