2009 (12) TMI 18

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....d under the Companies Act is engaged in the manufacturing activity of complete scooter seat. It claimed that it is an ancillary unit of LML Ltd., Kanpur, a manufacturer of Scooter. 3. In the assessment proceedings, the assessee claimed deduction under section 80-HH and 80-I of Income Tax Act but the said claim has been denied by the three authorities below on the ground that the condition of clause (iv) of Section 80-I is not fulfilled inasmuch as the workers employed through contractor are not to be treated as the workers employed in the Industrial Undertaking. Challenging the order of the Tribunal, the present appeals have been filed raising the following questions of law: "1) Whether the Tribunal is legally justified in denying the ben....

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....s as follows: "(iv) it employs 10 or more workers in the manufacturing process carried on with the aid of power, or employs twenty or more workers in a manufacturing process carried on without the aid of power." 10. On a plain reading of the aforesaid provision, it would show that the "employment" means the employment by the assessee. There should be a relationship of employer and employee between the workers and the assessee to qualify the aforesaid conditions. On the own showing of the assessee, it has employed with it only five workers. The other workers were employed by the contractor. The workforce employed by the contractor will not be counted for the purposes of afore stated clause in view of the words "it employs". The said phrase....