M/s. Chiranjeevi Wind Energy Ltd., Coimbatore V. ACIT, Coimbatore

ITA 2024/CHNY/2008

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 4449 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 8 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2005-2006
• Appeal Filed On: 20-10-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S SAROJKUMAR
• Keywords: Set aside
• Section: 80IB; 251; 80HH; 192

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH -- C CHENNAI (BEFORE SHRI ABRAHAM P.GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER) ..... ITA. NO.2024 / MDS/08 ASSESSMENT YEAR :2005-06 M/S CHIRANJEEVI WIND ENERGY LTD,. 45/3A, ARTS COLLEGE RD., OPP:BALA LODGE, COIMBATORE 641018 PAN:AAACC8761H (APPELLANT) V. THE ASST.COMMISSIONER OF INCOME-TAX CO.CIR I(3),COIMBATORE (RESPONDENT) APPELLANT BY : SRI S.SAROJKUMAR RESPONDENT BY : SRI B.SRINIVASAN O R D E PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : THE ASSESSEE IN THIS APPEAL IS AGGRIEVED THAT IT W AS DENIED CLAIM FOR A DEDUCTION UNDER SEC.80-IB OF THE INCOME-TAX ACT, 19 61. ACCORDING TO THE ASSESSEE IT WAS ENGAGED IN THE MANUFACTURING ACTIVI TIES AND WAS EMPLOYING MORE THAN 10 PERSONS THEREBY SATISFYING THE REQUIRE MENTS FOR SUCH A CLAIM. 2. WHEN THE MATTER HAS COME UP, THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT SIMILAR DISALLOWANCE OF ITS CLAIM U/S 80 -IB OF THE ACT WAS THERE IN EARLIER ASSESSMENT YEARS ALSO AND THIS TRIBUNAL IN ITS APPE AL HAD HELD IT TO BE ELIGIBLE FOR SUCH CLAIM. ORDERS OF THIS TRIBUNAL IN ITA NO.995/M DS/2007 DATED 30-3-2010 FOR ASST. YEAR 2004-05 AND IN ITA NOS.900 TO 902/MDS/09 FOR ASST. YEARS 2001- 02,2002-03 AND 2006-07 WERE FILED BY THE LD. COUNSE L FOR THE ASSESSEE. .LD. DEPARTMENTAL REPRESENTATIVE CLEARLY AGREED THAT THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL. ITA NO2024/MDS/08 2 3. WE FIND THAT ASSESSEE WAS DENIED DEDUCTION U/S 8 0-IB FOR THE REASON THAT HAS NOT COMPLIED WITH CL. (IV) OF SUB-SEC. (2) OF S EC.80IB AS THE ASSESSEE HAD NOT EMPLOYED THE REQUISITE NUMBER OF WORKERS AND ON A F INDING THAT IT WAS NOT CARRYING ON ANY MANUFACTURING ACTIVITIES. THIS TR IBUNAL IN ITS ORDER DATED 27-11- 09 FOR ASST. YEAR 2003-04 IN ASSESSEES OWN CASE H ELD AS UNDER: 3. WE HAVE HEARD THE LEARNED A.R. AS WELL AS THE LE ARNED DEPARTMENTAL REPRESENTATIVE AND CONSIDERED THE RELE VANT RECORDS. AT THE OUTSET, WE NOTE THAT THIS ISSUE HAS ALREADY BEEN CONSIDERED AND ADJUDICATED BY THIS TRIBUNAL VIDE ORDER DATED 2 7.11.2009 IN ASSESSEES OWN CASE IN I.T.A. NOS. 900, 901 & 902/M DS/2009 FOR THE ASSESSMENT YEARS 2001-02, 2002-03 & 2006-07 IN PARA NOS. 4 TO 18 AS UNDER:- 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAREFULLY PERUSED THE TRIBUNAL ORDER VIS- -VIS THE FACTS OF THE CASE. AT FIRST SITE, WE WERE OF THE OPINION THAT THE ISSUE INVOLVED IN ALL THESE APPEALS IS SQUARELY COVERED BY THE TRIBUNAL ORDER(SUPRA) IN ASSESSEES OWN CASE AND SO IT IS AN OPEN AND SHUT CASE. BUT THE LD.AR PLEADED FOR OUR INDULGENCE BY POLEMICALLY SUBMITTING THAT HE TOO RELIES ON THE SAME TRIBUNAL ORDER AND EVEN BY FOLLOWING THE ITA NO2024/MDS/08 3 FINDING GIVEN BY THE HON'BLE TRIBUNAL THE ASSESSEE IS BOUND TO SUCCEED. IT WAS ARGUED THAT THE HON'BLE TRIBUNAL HAS HELD IN ITS ORDER DATED 7.12.2007 ON WHICH THE LD. CIT(A) HAS RELIED, THAT THE ACTIVITY CARRIED ON BY THE ASSESSEE IS ONLY OF ASSEMBLING WIND OPERATED ELECTRICITY GENERATOR AND ERECTION THEREOF IN THE PLACE OF CUSTOMERS AND THE SAME CANNOT BE CONSTRUED AS A MANUFACTURING ACTIVITY ENTITLING THE ASSESSEE-COMPANY FOR THE RELIEF U/S 80IB. ACCORDING TO THE LD.AR AFTER THE DATE OF THIS ORDER THE FOLLOWING DECISIONS HAVE BROUGHT THE ACTIVITIES OF ASSEMBLING ALSO WITHIN THE PURVIEW OF MANUFACTURING/PRODUCTION. THE DECISIONS ON WHICH THE LD.AR HAS HEAVILY RELIED ON ARE AS UNDER: (I) CIT VS SHRI MAHESH CHANDRA SHARMA, 308 ITR 222 (P&H) JUDGMENT DATED 31.10.2008 (II) INDIA CINE AGENCIES VS CIT, 308 ITR 98 (S.C.) JUDGMENT DATED 12.11.2008 (III) VIJAY SHIP BREAKING CORPN. & OTHERS VS CIT , 219 CTR (S.C.)639 JUDGMENT DATED 01.10.2008 (IV) CIT VS ANAND AFFILIATES, 229 CTR (P&H) 167 JUDGMENT DATED 9.12.2008 ITA NO2024/MDS/08 4 (V) CIT VS PERFECT LINERS (1983) 142 ITR 654 (MAD) 5. IT WAS ARGUED IN THE LIGHT OF THE ABOVE DECISIONS THAT THESE ARE THE LATER DECISIONS AND THE TRIBUNAL IS BOUND TO FOLLOW THEM NOW AS THESE DECISIONS WERE NOT AVAILABLE ON 7.12.2007 WHEN THE TRIBUNAL PASSED ITS ORDER. 6. PER CONTRA, THE LD.DR HAS RELIED ON THE TRIBUNAL ORDER AND HAS FURTHER SUBMITTED THAT THE ASSESSEE ONLY ASSEMBLES THE WIND MILL AND THIS WOULD NEITHER AMOUNT TO PRODUCTION NOR MANUFACTURING ACTIVITY. 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS, WE ARE OF THE CONSIDERED OPINION THAT THE LATER JUDGMENTS RENDERED SUBSEQUENT TO THE TRIBUNAL ORDER HAVE TO BE FOLLOWED IN THEIR LETTERS AND SPIRIT. THERE IS A FORCE IN THE SUBMISSION OF THE LD.AR THAT THE TRIBUNAL HAS HELD THAT THE ASSESSEE-COMPANY ONLY ASSEMBLES WIND MILLS AT ITS FACTORY AND PUT THEM AT SITE OF THE CUSTOMERS. WHEN THE TRIBUNAL RENDERED ITS DECISION IN ASSESSEE-COMPANYS OWN CASE THE ITA NO2024/MDS/08 5 ASSEMBLING ACTIVITY WAS NOT TREATED AS A MANUFACTURING/PRODUCTION ACTIVITY. THE FACT FOUND BY THE TRIBUNAL IN ASSESSEE-COMPANYS OWN CASE IN ASSESSMENT YEAR 2003-04 HAVE TO BE TREATED AS CORRECT UNTIL THERE IS A CHANGE. THE TRIBUNAL HAS CATEGORICALLY HELD IN ITS ORDER RELIED ON BY THE LD. CIT(A) THAT THE ASSESSEE IS ASSEMBLING WIND OPERATED ELECTRICITY GENERATOR. THE RELEVANT PORTION OF THE TRIBUNAL ORDER IS BEING EXTRACTED VERBATIM, HEREIN AS BELOW: IN VIEW OF THIS, THE ACTIVITY CARRIED ON BY THE ASSESSEE IS ONLY ASSEMBLING WIND OPERATED ELECTRICITY GENERATOR (EMPHASIS SUPPLIED BY US) AND ERECTION IN THE PLACE OF CUSTOM AND THAT CAN NOT BE CONSTRUED AS MANUFACTURING ACTIVITY AND ACCORDINGLY RELIEF U/S 80IB CAN NOT BE ALLOWED. 5. REGARDING THE FINDING THAT THE ASSESSEE HAS NOT EMPLOYED MORE THAN 10 PERSONS, THE ASSESSEE HAS NOT PLACED ANY EVIDENCE TO CONTROVERT THE FINDING OF THE ASSESSING OFFICER. FURTHER THE BASIC CONDITION THAT THE ASSESSEE SHOULD MANUFACTURE OR PRODUCE ANY ARTICLE OR THING NOT BEING ANY ARTICLE OR THING SPECIFIED IN THE LIST IN THE ELEVENTH SCHEDULE, OR OPERATES ONE OR MORE COLD STORAGE PLANT OR PLANTS, IN ANY PART OF INDIA HAS NOT BEEN COMPLIED ITA NO2024/MDS/08 6 WITH BY THE ASSESSEE. HENCE THE QUESTION OF PROBING INTO NUMBER OF WORKERS IS ONLY ACADEMIC AND DOES NOT REQUIRE ANY ADJUDICATION. 8. THUS, IT CANNOT BE DISPUTED THAT THE ASSESSEE HAS BEEN HELD TO BE CARRYING ON THE ACTIVITY OF ASSEMBLING WIND MILLS. THIS IS ALSO THE ADMITTED CASE OF THE REVENUE. THE HON'BLE P&H HIGH COURT IN THE CASE OF SHRI MAHESH CHANDRA SHARMA (SUPRA) HAS CATEGORICALLY HELD ON 31.10.2008 THAT ASSEMBLING OF WHEELS USING DIFFERENT COMPONENTS AMOUNTS TO MANUFACTURE. IN THAT CASE THE ASSESSEE WAS ASSEMBLING WHEELS FROM RIM, TYRE, TUBE, BEARING, DRUM, SPOKE, NIPPLE AND COLLAR. THIS ASSEMBLING HAS BEEN HELD TO BE A MANUFACTURING ACTIVITY AS UNDER: IN THE ABSENCE OF ANY DEFINITION IN THE INCOME-TAX ACT, 1961 THE WORD MANUFACTURE USED IN SECTION 80-IB HAS TO BE GIVEN ITS ORDINARY MEANING. THE EXPRESSION MANUFACTURE HAS BEEN UNDERSTOOD TO MEAN TRANSFORMATION OF GOODS INTO A NEW COMMODITY COMMERCIALLY DISTINCT AND SEPARATE HAVING ITS OWN CHARACTER, USE ITA NO2024/MDS/08 7 AND NAME WHETHER IT BE THE RESULT OF ONE OR SEVERAL PROCESSES. THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 80-IB WHICH WAS DISALLOWED BY THE OF THE ACT ON THE GROUND THAT THE ASSEMBLING/JOB WORK DONE BY THE ASSESSEE DID NOT AMOUNT TO MANUFACTURING ACTIVITY, WHICH WAS A CONDITION FOR CLAIMING DEDUCTION UNDER SECTION 80-IB OF THE ACT. THE COMMISSIONER OF INCOME-TAX (APPEALS) UPHELD THE CLAIM OF THE ASSESSEE AND THIS WAS AFFIRMED BY THE INCOME-TAX APPELLATE TRIBUNAL. ON APPEAL TO THE HIGH COURT: HELD(I) THAT IF A CLAIM FALLS UNDER SECTION 80-IB OF THE ACT, IT COULD NOT BE DISALLOWED ON THE GROUND THAT THE TRIBUNAL ERRONEOUSLY MADE REFERENCE TO SECTION 80- IA. (II) THAT THE ASSESSEE ASSEMBLED THE WHEELS FROM THE RAW MATERIAL/COMPONENTS WHICH WERE RIM, TYRE, TUBE, BEARING, DRUM, SPOKE, NIPPLE AND COLLAR BY DIFFERENT PROCESSES. THE WHEEL WAS CERTAINLY A DIFFERENT ITEM FROM THE COMPONENTS WHICH WERE USED IN THE PROCESS. THE ASSESSEE WAS ENTITLED TO SPECIAL DEDUCTION UNDER SECTION 80-IB. ITA NO2024/MDS/08 8 9. AGAIN THE HON'BLE P&H HIGH COURT IN THE CASE OF ANAND AFFILIATES (SUPRA) HAS HELD ASSEMBLING AS MANUFACTURING ACTIVITY. 10. THE HON'BLE SUPREME COURT IN THE CASE OF VIJAY SHIP BREAKING CORPN & OTHERS VS CIT (SUPRA) HAS ELABORATELY GIVEN THE DEFINITION OF THE WORD PRODUCTION AS UNDER: THE IMPORTANT TEST WHICH DISTINGUISHES THE WORD PRODUCTION FROM MANUFACTURE IS THAT THE WORD PRODUCTION IS WIDER THAN THE WORD MANUFACTURE. FURTHER, IT IS TRUE THAT THE BUDHARAJAS CASE, THE DIVISION BENCH HAS USED THE WORD NEW ARTICLE. HOWEVER, WHAT THE DIVISION BENCH MEANT WAS THAT A DISTINCT ARTICLE EMERGES WHEN THE PROCESS OF SHIP BREAKING IS UNDERTAKEN. FURTHER, THE LEGISLATURE HAS USED THE WORDS MANUFACTURE OR PRODUCTION. THEREFORE, THE WORD PRODUCTION CANNOT DERIVE ITS COLOUR FROM THE WORD MANUFACTURE. FURTHER, EVEN ACCORDING TO THE DICTIONARY MEANING THE WORD PRODUCTION, THE WORD PRODUCE IS DEFINED AS SOMETHING WHICH IS BROUGHT FORTH OR YIELDED EITHER NATURALLY OR AS A RESULT OF EFFORT AND WORK. IT IS IMPORTANT TO NOTE THAT THE WORD NEW IS ITA NO2024/MDS/08 9 NOT USED IN THE DEFINITION OF THE WORD PRODUCE. TRIBUNAL IN THE PRESENT CASE WAS RIGHT IN ALLOWING THE DEDUCTION UNDER SS. 80HH AND 80-I TO THE ASSESSEE HOLDING THAT THE SHIP-BREAKING ACTIVITY GAVE RISE TO THE PRODUCTION OF A DISTINCT AND DIFFERENT ARTICLE CIT VS VIJAY SHIP BREAKING CORPN & ORS (2003) 181 CTR (GUJ) 134 SET ASIDE, CIT VS N.C. BUDHARAJA & CO. & ANR. (1993) 114 CTR (SC) 420: (1993) 204 ITR 412 (S.C) AND CIT VS SESA GOA LTD (2004) 192 CTR (S.C) 577: (2004) 271 ITR 331(S.C.) RELIED ON: SHIP SCRAP TRADERS & ORS. VS CIT (2001) 168 CTR (BOM) 489: (2001) 251 ITR 806 (BOM) APPROVED. 11. LIKEWISE, THE HON'BLE APEX COURT HAS HELD IN THE CASE OF INDIA CINE AGENCIES AS UNDER: THE ASSESSEE CONVERTED JUMBO ROLLS OF PHOTOGRAPHIC FILMS INTO SMALL FLATS AND ROLLS IN THE DESIRED SIZES. IT CLAIMED THAT THE SAME AMOUNTED TO MANUFACTURE/PRODUCTION FOR THE PURPOSE OF ALLOWANCES UNDER SECTIONS 32AB, 80HH AND 80-I OF THE INCOME-TAX ACT, 1961. THE HIGH COURT HELD THAT IT DID NOT. THE ASSESSEE APPEALED TO THE SUPREME COURT: ITA NO2024/MDS/08 10 HELD: REVERSING THE DECISIONS OF THE HIGH COURT, THAT THE ASSESSEE WAS ENTITLED TO THE ALLOWANCE UNDER SECTIONS 32AB, 80HH AND 80-I. THE WORD PRODUCTION OR PRODUCE WHEN USED IN JUXTAPOSITION WITH THE WORD MANUFACTURE TAKES IN BRINGING INTO EXISTENCE NEW GOODS BY A PROCESS, WHICH MAY OR MANY NOT AMOUNT TO MANUFACTURE. IT ALSO TAKES IN ALL THE BY-PRODUCTS, INTERMEDIATE PRODUCTS AND RESIDUAL PRODUCTS, WHICH EMERGE IN THE COURSE OF MANUFACTURE OF GOODS. 12 . THE HON'BLE MADRAS HIGH COURT IN THE CASE OF PERFECT LINERS HAS HELD AS UNDER: HELD THE WORD MANUFACTURE HAS TO BE UNDERSTOOD IN A WIDE SENSE. AFTER THE ROUGH CASTINGS ARE POLISHED, THE PRODUCT IS A NEW PRODUCT WHICH IS UTILIZED AS COMPONENT IN INTERNAL COMBUSTION ENGINES. THE TRIBUNAL HAS FOUND THAT COMPONENT PARTS ARE ESSENTIAL PARTS FOR INTERNAL COMBUSTION ENGINES. HENCE THE TRIBUNAL WAS RIGHT IN LAW IN HOLDING THAT THE ASSESSEE WAS ENTITLED TO HIGHER ITA NO2024/MDS/08 11 DEVELOPMENT REBATE AT 35% UNDER S.33(1)(B)(B)(I). CONCLUSION THE PROCESS OF POLISHING ROUGH CASTING WHICH AE USED AS COMPONENT IN INTERNAL COMBUSTION ENGINES, BEING A MANUFACTURING ACTIVITY THE ASSESSEE IS ENTITLED TO HIGHER RATE OF DEVELOPMENT REBATE UNDER ITEM (24) OF SCH.V. 13. IT WAS ARGUED BY THE LD.AR THAT THE TRIBUNAL HAS NOT CONSIDERED THE TERM PRODUCTION AND HENCE, THE DECISION IS PER INCURIAM; AND THAT IN THE LIGHT OF THE DEFINITION OF THE TERM PRODUCTION GIVEN BY THE HON'BLE SUPREME COURT AS ABOVE, THE ACTIVITY OF THE ASSESSEE WOULD NOT ONLY AMOUNT TO PRODUCTION BUT ALSO TO MANUFACTURE. 14. WE ARE IN AGREEMENT WITH THE LD.AR THAT EVEN BY FOLLOWING THE TRIBUNAL ORDER SUPRA, THE ASSEMBLING IS ALSO NOW TO BE HELD AS A MANUFACTURING ACTIVITY IN VIEW OF THE SUBSEQUENT DECISION OF HON'BLE HIGH COURT. THUS, BY FOLLOWING THE TRIBUNAL ORDER ON FACTS, WE ARE OF THE CONSIDERED OPINION THAT ITA NO2024/MDS/08 12 THE INTERPRETATION OF LAW AS LAID DOWN BY THE HON'BLE HIGH COURT AND HON'BLE SUPREME COURT BRINGS THE ASSEMBLING ACTIVITIES OF THE ASSESSEE UNDER THE DEFINITION OF MANUFACTURE AND PRODUCTION. WE CANNOT IGNORE THE SUBSEQUENT LEGAL POSITION WHICH HOLDS EVEN THE ASSEMBLING ACTIVITY AS A MANUFACTURING ACTIVITY, RATHER WE ARE BOUND TO FOLLOW THE SAME. THE REVENUE COULD NOT SUCCESSFULLY CONTROVERT THE ABOVE RECENT LEGAL POSITION ON THE SUBJECT AND THE LD.DR ONLY RELIED ON OTHER DECISIONS FROM WHICH ONLY IT COULD BE INFERRED THAT IF THE ASSESSEE UNDERTAKING HAS BEEN CARRYING ON MANUFACTURING/PRODUCTION ACTIVITIES, ONLY THEN IT IS ELIGIBLE FOR SUCH A DEDUCTION. WE ARE IN AGREEMENT WITH THE LD.DR TO THAT EXTENT. MOREOVER, IT IS NOBODYS CASE OTHERWISE. BUT IF WE APPLY THE LATEST CASE LAW TO THE FACTS ESTABLISHED BY THE TRIBUNAL IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2003-04, THE ASSESSEE-COMPANY BECOMES ELIGIBLE FOR THIS DEDUCTION. THEREFORE, BY ACCEPTING THE FACTUAL ITA NO2024/MDS/08 13 POSITION AS CULLED OUT BY THE TRIBUNAL IN ITS ORDER DATED 7.12.2007 AND BY APPLYING THE LATEST LEGAL POSITION, WE ARE BOUND TO HOLD THAT THE ACTIVITIES OF THE ASSESSEE IS A MANUFACTURING/PRODUCTION ACTIVITY. HENCE, WE HOLD ACCORDINGLY. 15. THE OTHER IMPORTANT CONDITION FOR CLAIMING DEDUCTION U/S 80-IB IS AS DETAILED IN THE EARLIER PART OF THIS ORDER. AS PER THE ASSESSING OFFICER, THE ASSESSEE DID NOT FULFILL THE CONDITION NOS(III) AND (IV). SINCE NOW WE HAVE HELD THAT CONDITION NO.(III) IS ALSO FULFILLED BY THE ASSESSEE-COMPANY, NOW IT REMAINS TO BE EXAMINED WHETHER CONDITION NO.(IV) IS FULFILLED OR NOT. THIS CONDITION SAYS THAT IN A CASE WHERE THE INDUSTRIAL UNDERTAKING MANUFACTURES OR PRODUCES ARTICLES OR THINGS, THE UNDERTAKING EMPLOYS TEN OR MORE WORKERS IN A 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 . ITA NO2024/MDS/08 14 16. IN THIS REGARD, THE TRIBUNAL IN ITS ORDER DATED 7.12.2007 HAS NOT ADJUDICATED UPON AND HAS LEFT IT OPEN. THE ASSESSEE CLAIMS THAT IT HAS FULFILLED THIS CONDITION ALSO, BUT THE LD.DR SAYS THAT THIS CONDITION HAS NOT BEEN FULFILLED. 17. THE SECOND REASON GIVEN BY THE ASSESSING OFFICER FOR DENYING 80IB DEDUCTION IS THAT THE FACTORY HAS NOT EMPLOYED THE MINIMUM NUMBER OF EMPLOYEES REQUIRED FOR CLAIMING THIS DEDUCTION. THE ASSESSING OFFICER HAS MAINLY RELIED IN THIS REGARD, ON THE STATEMENT OF SHRI MANI RECORDED ON 5.1.2006 IN WHICH HE HAS STATED THAT HE WAS ONLY A PERMANENT EMPLOYEE AT THE FACTORY AND THAT THE ASSESSEE-COMPANY HAD NOT DONE ANY MANUFACTURING ACTIVITY IN THE FACTORY BUT ONLY WIND MILLS ARE BEING ASSEMBLED THERE. THE ARGUMENT AS ADVANCED BY THE LD.AR IS THAT IF THE STATEMENT OF SHRI MANI IS CONSIDERED IN TOTO IN THE LIGHT OF OTHER AVAILABLE EVIDENCES, IT WOULD BE ESTABLISHED THAT MORE THAN 12 EMPLOYEES WERE EMPLOYED TO CARRY OUT THE ITA NO2024/MDS/08 15 ASSEMBLING OF THE WIND MILLS. IT IS NOT THE REQUIREMENT OF THE LAW WHETHER THESE EMPLOYEES OUGHT TO BE PERMANENT, TEMPORARY OR DAILY WAGER, AS PER LD.AR. HE HAS SHOWN US THE COPIES OF MUSTER ROLLS OF SUCH EMPLOYEES AND HAS ALSO RELIED ON CERTAIN CASE LAWS IN SUPPORT OF HIS CONTENTION. 18. WE HAVE CAREFULLY TREADED THROUGH THE STATEMENT OF SHRI MANI. HE HAS NOWHERE STATED THAT EXCEPT HIM NO OTHER WORKER WAS EMPLOYED BY THE COMPANY. WHAT, IN CONTENT, HE HAS STATED IS THAT HE IS ONLY THE PERMANENT EMPLOYEE AT THE FACTORY. HE HAS CONFIRMED THE ACTIVITIES OF ASSEMBLING OF WIND MILLS. ACTUALLY SECTION 80IB(2)(IV) SAYS THAT SUCH UNDERTAKING SHOULD EMPLOY TEN OR MORE WORKERS IF THIS ACTIVITY IS DONE WITH THE HELP AND AID OF POWER. THIS SECTION TALKS OF WORKERS AND NOT OF EMPLOYEES WHETHER PERMANENT OR TEMPORARY ETC. THE HON'BLE MUMBAI BENCH D OF THE ITAT IN THE CASE OF ACIT VS MS. RICHA CHADHA (2005) 96 ITD 325 (MUMB) HAS HELD THAT ALL WORKERS WHETHER ITA NO2024/MDS/08 16 PERMANENT OR CASUAL, EMPLOYED BY THE ASSESSEE IN THE MANUFACTURING PROCESS AS WELL AS IN SUBSIDIARY ACTIVITIES ARE TO BE COUNTED FOR DETERMINING COMPLIANCE WITH THE REQUIREMENT OF THE ACT, IF TEN OR MORE WORKERS WERE EMPLOYED FOR SUBSTANTIAL PART OF THE WORKING PERIOD OF FACTORY, IT WOULD BE SUFFICIENT COMPLIANCE OF THE CONDITION . COPIES OF WAGE REGISTERS MAINTAINED DURING THE RELEVANT PERIOD HAVE BEEN PRODUCED BEFORE US AND THESE WERE ALSO PRODUCED BEFORE THE ASSESSING OFFICER, BUT THE ASSESSING OFFICER CHOSE TO RELY ON A STATEMENT OF SHRI MANI, AN EMPLOYEE, THAT TOO BY TEARING IT OUT OF CONTEXT OF SWORN STATEMENTS OF SHRI R. RAMESH AND OF SHRI R. MANI. THESE STATEMENTS SUPPORT THE CASE OF THE ASSESSEE-COMPANY. THERE IS FORCE IN THE SUBMISSION OF THE LD.AR THAT SUCH HUGE ACTIVITY CANNOT BE CARRIED ON WITHOUT THE HELP OF MORE THAN 10 WORKERS. ALTHOUGH THIS ISSUE COULD BE RESTORED TO THE FILE OF THE ASSESSING OFFICER, BUT IT WOULD AMOUNT TO FUTILE EXERCISE GIVEN THE FACT THAT ITA NO2024/MDS/08 17 ENTIRE FACTS OF THIS ISSUE ARE AVAILABLE BEFORE US. HENCE, WE ARE OF THE OPINION THAT THE ASSESSEE-COMPANY FULFILLS ALL THE ELIGIBILITY CRITERION FOR DEDUCTION U/S 80IB. WE ORDER ACCORDINGLY AND ALLOW ALL THE APPEALS OF THE ASSESSEE FOR ASSESSMENT YEARS 2001-02, 2002-03 AND 2006-07. 4. THE ABOVE VIEW WAS FOLLOWED BY THIS TRIBUNAL F OR ASST. YEAR 2004-05 ALSO BY ITS ORDER DATED 30-3-2010; IN ITA NO.995/MDS/200 7. FOLLOWING THESE EARLIER ORDERS OF THE TRIBUNAL IN ASSESSEES OWN CASE, FOR THE IMPUGNED ASSESSMENT YEAR ALSO WE DECIDE THIS ISSUE IN FAVOUR OF THE ASS ESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. THE ORDER WAS PRONOUNCED IN THE COURT ON 16-7-2 010. SD/- SD/- (GEORGE MATHAN) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, 16 TH JULY, 2010 NBR CC: THE ASSESSEE/ASSESSING OFFICER/CIT(A)/CIT/DR/GU ARD FILE