2019 (2) TMI 816

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....8/Mds/2016 dated 25.11.2016. 2.The appeals have been admitted vide order dated 03.12.2018 on the following substantial questions of law: "1.Whether under facts and circumstances of the case the Income Tax Appellate Tribunal was right in hokding that the appelant is not eligible for deduction under section 80IB? 2.Whether under the facts and circumstances of the case, is the finding of the Income tax Appellate Tribunal that the appellant did not fulfil the condition of employing ten or more number of persons in its manufacturing process, not perverse?" 3.We have heard Mr.J.Naresh Kumar, learned counsel appearing for the appellant and Mr.Karthik Ranganathan, learned senior standing counsel appearing for the respondent. 4.The short issu....

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....d employ ten or more workers in a manufacturing process carried on with the aid of power or should employ 20 or more workers in a manufacturing process carried on without aid of power. The assessee's case is that they have got more than ten workers and therefore, entitled to the benefit of the said provision. The initial assessment was completed under section 143(3) r/w 147 of the Act vide order dated 22.02.2006. The Assessing Officer noted that the Managing Director of the appellant/assessee withdrew his claim under Section 80IB(2)(iv), subsequently he retracted the said withdrawal and gave a fresh statement. Therefore, the Assessing Officer proceeded to consider the entitlement of the assessee and held that the assessee is not entitle....

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.... Kumar, learned counsel for the appellant who placed heavy reliance on the statement given by the security/Chowkidar and it is submitted that the assessee has been making ESI contribution for the said worker ever since 2001 and those records though produced before the Assessing Officer were not considered. As rightly pointed out by Mr.Karthik Ranganathan, learned senior standing counsel appearing for the Revenue, the remand report which was submitted by the Assessing Officer on a direction issued by the CIT(A) states that the ESI return extract shows that most of the workers are engaged for broken period and they are casual labourers and cannot be termed as workers connected with manufacturing process. Further the remand report stated that ....