Section 80J worker-employment test denied deduction where piece-rate fabricators were not proved to be employees.

Deduction under section 80J(4) depended on proof that the assessee employed the requisite minimum number of workers. On the admitted facts, the regular workforce was below the statutory threshold, and persons engaged on a piece-rate basis for fabricating, dyeing, printing and embroidery were not shown to be employees. They worked independently and also for others, so there was no factual basis to treat them as workers employed by the assessee for the provision. The deduction was therefore unavailable, and the issue was answered in favour of the Revenue.

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Issues: Whether the assessee was entitled to deduction under section 80J(4) of the Income-tax Act, 1961, where the persons engaged for fabricating, dyeing, printing and embroidery were not shown to be on the payroll or in regular employment.

Analysis: The claim for deduction depended upon satisfaction of the statutory conditions in section 80J(4), including the employment of the requisite number of workers. On the admitted facts, the number of regular workers employed fell below the statutory minimum. The payments made to fabricators, dyers, printers and embroiderers on piece-rate basis did not establish that they were employees of the assessee. They operated independently, carried out work not only for the assessee but also for others, and there was no factual foundation for treating them as workers employed by the assessee for the purposes of the provision.

Conclusion: The assessee was not entitled to deduction under section 80J(4), and the question was answered in favour of the Revenue.

Ratio Decidendi: For deduction under section 80J(4), the statutory requirement of employing the requisite number of workers must be satisfied by proof of actual employment, and independent piece-rate contractors cannot be treated as workers absent evidence of an employment relationship.

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