TaxTMI 
TaxTMI 
2012 (8) TMI 453
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....ted below 1. The order of the CIT(A) is opposed to Law and facts of the case. 2. On the facts and in the circumstances of the case and in Law, the Ld.CIT(A) has erred in ho[ding that the assessee employed and average 10 workers when in fact on[y 8 workers were employed throughout the year. 3. On the facts and in the circumstances of the case and in Law the Ld.CIT(A) has erred in holding that a watchmen Looking after the security of the premises can be treated as workers engaged in the manufacturing process. 4. The Ld.CIT(A) failed to take into consideration the decision of the jurisdictional High Court in the case of CIT vs.Sawyer's Asia Ltd. - 122 ITR 259 wherein it was held that it is only the workers empLoyed in connection with the m....
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....s Panorama Industries in ITA no. 3104/Mum/97 dated 31/05/04. 4 Before us, the Ld DR has submitted that the assessee has employed total 11 persons out of which two are watchmen and one Factory Manager; therefore, the number of workers who are employed in connection with the manufacturing process are only 8. The ld DR has further submitted that only the workers employed in connection with the manufacturing process are to be taken into consideration for the purpose of section 80 IB. The Factory Manager and Watchmen are not employed in connection with the manufacturing process; therefore, they can not be considered as a worker for the purpose of section 80 IB. In support of his contention he has relied upon the decision of Hon'ble jurisdiction....
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....sment proceedings in pursuant to the order of this Tribunal, the Assessing Officer examined the watchmen and the factory manager. In the statement, the watchmen had confirmed that they were also performing other duties like packaging, preparing gate pass, maintaining attendance register etc., It is to be noted that when the watchmen as well as the factory manager are employed at the factory itself and performing their duties in connection with the activities carried out by the assessee in the factory, then it cannot be said that the watchmen and the factory manager are not employed in connection with the manufacturing process carried out by the assessee. 6.1 In case of Sultan and Sons Rice Mill (supra), the Hon'ble High Court, after consid....
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....olding that only two or three persons are required to run an automatic rice plant has interpreted the words "manufacturing process in a very narrow manner". The manufacturing process includes within its ambit that the raw material to be filled in the plant in such a shape and condition, which may be acceptable or can be fed in the plant. In the case of rice mill the palledars are required to bring paddy from the store or godown to the starting point of the plant. Drying of paddy is also necessary, as found by the Tribunal before putting the paddy in the plant. The workers are also required to clean the plant and remove bhoosi, husk, etc. The assessee claimed that the manufacturing process started after the point of purchase of paddy. Paddy ....
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.... Tax(Appeals) has reproduced the relevant part of the order of the coordinate bench in para-2 of the impugned order as under: 2. Shri Chandrakant Mody, director of the company appeared and submitted that the A.O. is not justified in disallowing deduction u/s. 801B. According to him, the assessee has employed more than 10 persons in the manufacturing business. Hence, the assessee is eligible for deduction u 801B. He relied on the decision of ITAT, Murnbai, in the case of Mis. Panorma Industries vs. DCIT as reported in ITA No.3104/Muni/97 dated 31/5/04. In this case the Hon'ble ITAT, Murnbai, held as under: "We have heard the rival submissions and considered the facts and material on record including the case laws relied upon by both the p....