The ITO, Vapi Ward-2, Vapi V. M/s. Jay Packaging, Silvassa

ITA 2264/AHD/2005

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 5486 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 9 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 27-07-2010
• Assessment Year: 1998-1999
• Appeal Filed On: 26-10-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Additional evidence; Wrong claim; Corroborative evidences; Assessment record
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH B BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI D.C. AGRAWAL, ACCOUNTANT MEMBER DATE OF HEARING : 27/07/2010 DRAFTED ON: 28/07/2 010 1. ITA NO.2264/AHD/2005 - A.Y. 1998-1999 2. ITA NO.2265/AHD/2005 - A.Y. 1999-2000 3. ITA NO.2266/AHD/2005 - A.Y. 2000-2001 4. ITA NO.2267/AHD/2005 - A.Y. 2002-2003 5. ITA NO.3047/AHD/2004 - A.Y. 2001-2002 I.T.O.VAPI WARD-2 VAPI VS. M/S.JAY PACKAGING PLOT NO.16 DAN UDYOG SAHKARI SANGH LTD. PIPARIA SILVASSA PAN/GIR NO. : AABEJ 9816 G VS. ( APPELLANTS ) ( RESPONDENTS ) ASSESSEE BY: SHRI TUSHAR P.HEMANI REVENUE BY: SHRI K.MADHUSUDAN, SR.D.R. O R D E R PER BENCH : IN ALL THESE FIVE ASSESSMENT YEARS, THE ISSUE AS RAISED BY THE REVENUE IS ALMOST IDENTICAL, THEREFORE, THESE APPEA LS HAVE BEEN CONSOLIDATED WHICH HAVE EMANATED FROM THE SEPARATE ORDERS OF LEARNED CIT(APPEALS)-VALSAD. HOWEVER, IDENTICALLY DATED 2 0/07/2005 FOR AYS 1998-99, 1999-2000, 2000-01 & 2002-03. FOR AY 20 01-02, THE IMPUGNED ORDER OF LEARNED CIT(APPEALS) IS DATED 10/ 08/2004. ITA NOS.2264,2265,2266,2267/AHD/2005 & ITA NO.3047/AHD/2004 ITO VS. M/S.JAY PACKAGING ASST.YEARS 1998-99 TO 2000-01,2002-03 AND 2001-02 (RESPECTIVELY) - 2 - 2. THE LEAD ASSESSMENT YEAR IS 2001-02 WHICH IS S TART POINT OF THE DISALLOWANCE OF CLAIM OF DEDUCTION U/S.80IB OF THE I.T. ACT, 1961. THE FIRST GROUND IN ALL THESE FIVE YEARS IS IN RESPECT OF THE IMPUGNED CLAIM OF U/S.80IB OF THE I.T. ACT, 1961. BARRING VARIATION IN THE QUANTUM OF DISALLOWANCE RESPECTIVELY MADE BY THE ASSESSING OFF ICER IN THE YEARS INVOLVED THERE IS NO VARIATION AS FAR AS THE ISSUE AND THE LEGAL OBJECTION RAISED BY THE ASSESSEE IS CONCERNED. TO DECIDE TH E QUESTION INVOLVED, WE HAVE TO EXAMINE THE REASONS OF DISALLOWANCE AS EMAN ATED FROM THE ASSESSMENT ORDERS. 3. TO PAVE THE WAY, ASSESSMENT YEAR 2001-02 WAS THE YEAR PRECEDED THE OTHER ASSESSMENT YEARS, NOW ALSO IN APPEAL BEFO RE US, AND FOR THAT YEAR THE ASSESSMENT WAS MADE U/S.143(3) DATED 25/11 /2003. THE ASSESSEE-FIRM IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF PAPER TUBE SITUATED AT DADRA NAGAR & HAVELI A UNION TERRITORY OF SILVASSA WITHIN THE SPECIFIED BACKWARD AREA OF VIIITH SCHEDU EL OF THE IT ACT. UNDISPUTEDLY THE UNIT WAS ESTABLISHED IN THE YEAR 1 997, I.E. ON 01/07/1997 THE DATE OF START OF MANUFACTURING OF AC TIVITY. THE IMPUGNED DEDUCTION WAS THEREAFTER CLAIMED FROM ASSESSMENT YE AR 1998-99 ONWARDS. THE ASSESSING OFFICER HAS DISCUSSED THE P ROVISIONS OF SECTION 80IB OF THE I.T. ACT, 1961 AND, THEREAFTER, HE HAS NOTICED THAT ONE OF THE CONDITIONS AS PRESCRIBED U/S.80IB(2)(IV) OF THE I.T . ACT, 1961 HAS NOT BEEN FULFILLED BY THE ASSESSEE WHICH READS AS FOLLO WS:- ITA NOS.2264,2265,2266,2267/AHD/2005 & ITA NO.3047/AHD/2004 ITO VS. M/S.JAY PACKAGING ASST.YEARS 1998-99 TO 2000-01,2002-03 AND 2001-02 (RESPECTIVELY) - 3 - DEDUCTION U/S.80IB (I).. (II) (III) (IV) IN A CASE WHERE THE INDUSTRIAL UNDERTAKING MANUFACT URES OR PRODUCES ARTICLES OR THINGS, THE UNDERTAKING EMPLOY S TEN OR MORE WORKERS IN A MANUFACTURING PROCESS CARRIED ON WITH THE AID OF POWER, OR EMPLOYS TWENTY OF MORE WORKERS IN A MANUFACTURING PROCESS CARRIED ON WITHOUT THE AID OF POWER.' 3.1. ACCORDING TO ASSESSING OFFICER AS PER SECTION 80IB(2)(IV) OF THE I.T. ACT, 1961 IF THE MANUFACTURING IS CARRIED OUT WITH THE AID OF POWER, THEN THE UNIT SHOULD EMPLOY 10 OR MORE EMPLOYEES. ON ENQUIRY, THE DETAILS OF THE EMPLOYEES WERE FURNISHED AS UNDER:- 1. SUNIL 2. YUSUF 3. VINOD 4. YOGESH 5. SIVARAM 6. DINESH 7. ASHOK 8. SANGITA 9. PALI 10. LILA 11. SAJEEV 3.2. THE ASSESSING OFFICER HAS THEREAFTER NOTED THA T THOUGH THE NAMES OF THE EMPLOYEES WERE FURNISHED BUT THEIR DETAILED ADDRESSES WERE NOT PRODUCED. THE SECOND OBSERVATION OF THE ASSESSING OFFICER WAS THAT AS PER THE CERTIFICATE ISSUED BY THE DIRECTORATE OF IN DUSTRIES, DADRA & NAGAR HAVELI, THE MANAGERIAL & OFFICE STAFF WAS ONE IN NUMBER AND WORKERS/SUPERVISORS WERE FIVE IN NUMBER TOTALLING SIX IN NUMBER WAS ITA NOS.2264,2265,2266,2267/AHD/2005 & ITA NO.3047/AHD/2004 ITO VS. M/S.JAY PACKAGING ASST.YEARS 1998-99 TO 2000-01,2002-03 AND 2001-02 (RESPECTIVELY) - 4 - CERTIFIED. TO VERIFY THE CORRECT NUMBER OF WORKER S, ONE OF THE PARTNERS MR. JITENDRA M.PATEL AND THE SUPERVISOR SHRI SAJEEV KUMAR NAIR WERE SUMMONED AND THEIR STATEMENTS WERE RECORDED U/S.131 OF THE I.T. ACT, 1961. THE QUESTION-ANSWERS HAVE ALSO BEEN REPRODU CED BY THE ASSESSING OFFICER. AFTER A DETAILED DISCUSSION, T HE ASSESSING OFFICER HAS ARRIVED AT THE CONCLUSION THAT THE ASSESSEE WAS UNA BLE TO FURNISH THE NAMES AND ADDRESSES OF THE EMPLOYEES AND THE PARTNE R HAS NOT EVEN AFFIRMED THE EXACT NUMBER OF THE EMPLOYEES, THEREFO RE, NOT ENTITLED FOR THE CLAIM OF DEDUCTION U/S.80IB OF THE I.T. ACT, 19 61. FURTHER AS PER ASSESSING OFFICER, THE SUPERVISOR HAS ALSO MADE A S TATEMENT ON OATH AND THEREIN AFFIRMED THAT THERE WERE SEVEN LABOURERS EM PLOYED. SOME CONTROVERSY HAS ALSO BEEN DISCUSSED ABOUT MISUNDERS TANDING OF HINDI LANGUAGE BY SHRI SAJEEV KUMAR NAIR WHICH HAS FINALL Y RESULTED INTO THE DISALLOWANCE OF THE CLAIM OF DEDUCTION U/S.80IB OF THE I.T. ACT, 1961. 4. THE MATER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY. BEFORE THE FIRST APPELLATE AUTHORITY, THE ASSESSEE HAS BRO UGHT ON RECORD THE LIST OF PERMANENT WORKERS AND THE TEMPORARY WORKERS ALONGWITH PHOTOCOPIES OF THE SALARY REGISTER BOTH FOR PERMANE NT WORKERS AND TEMPORARY WORKS. AS FAR AS THE OTHER REASON FOR DISALLOWANCE OF TH E ASSESSING OFFICER IS CONCERNED, THE LEARNED CIT(APP EALS) HAS ALSO TAKEN THE DUE NOTE OF THE CERTIFICATE ISSUED BY THE DIREC TORATE OF INDUSTRIES WHICH WAS LATER ON AMENDED AFTER VERIFICATION. IN THIS REGARD, THE LEARNED CIT(APPEALS) HAS CALLED FOR A REMAND REPORT BY INFORMING THE ITA NOS.2264,2265,2266,2267/AHD/2005 & ITA NO.3047/AHD/2004 ITO VS. M/S.JAY PACKAGING ASST.YEARS 1998-99 TO 2000-01,2002-03 AND 2001-02 (RESPECTIVELY) - 5 - FACTS OF THE CASE AND, THEREAFTER, ARRIVED AT THE C ONCLUSION IN FAVOUR OF THE ASSESSEE VIDE PARAGRAPH NO.29; REPRODUCED BELOW:- 29. THE FIRST-INGREDIENT OF THE FINDING OF THE A SSESSING OFFICER IS THAT HE RELIED ON THE CERTIFICATE OF THE DIRECTORAT E OF INDUSTRIES, DADRA & NAGAR HAVEL, SILVASSA ISSUED VIDE REGISTRAT ION NO.DIC/1(857)/SSI/96/2128 DATED 22.09.97. THIS CE RTIFICATE HAS BEEN REVISED BY THE SAME AUTHORITY BY AMENDING THE CERTIFICATE VIDE HIS LETTER NO.DIC/1(857)/SSI/96/22 DATED 09.01 .2001. IT HAS BEEN MADE EFFECTIVE FROM 22.09.1997. THE ASSESSIN G OFFICER IN PARA-15.1 OF HIS ORDER STATED THAT THE CERTIFICATE IS LIABLE TO BE CANCELLED IF THE DECLARATION IS FOUND TO BE FALSE. THE CERTIFICATE HAS THEREFORE, MUST HAVE BEEN AMENDED AFTER NECESSA RY VERIFICATION. THE ASSESSING OFFICER WAS INFORMED V IDE THIS OFFICE LETTER DATED 07.04.04 THAT THE DIRECTORATE OF INDUS TRIES HAS AMENDED THE CERTIFICATE W.E.F. 22.09.97 AN WORKING STRENGTH HAS BEEN SHOWN AS THREE FOR MANAGERIAL STAFF AND TWELVE FOR SUPERVISOR AND WORKERS. HE WAS ASKED TO EXAMINE THIS ISSUE I N CONSULTATION WITH THE DISTRICT INDUSTRIES CENTRE. HE WAS ALSO ASKED, IF REQUIRED, THE GENERAL MANAGER MAY BE EXAMINED ON OA TH. NOTHING WAS DONE BY THE ASSESSING OFFICER IN THIS R ESPECT. HE STATED IN PARA-10.1 OF HIS REPORT DATED 14.05.04 TH AT SUMMONS U/S.131 OF THE ACT WAS ISSUED TO THE GENERAL MANAGE R BUT HE INFORMED THAT HE IS THE ELECTION OFFICER FOR DADRA & NAGAR HAVELI AND HE CANNOT ATTEND IN RESPONSE TO SUMMONS. THOU GH, THE VERSION OF THE GENERAL MANAGER MAY BE CORRECT BUT T HE ELECTION PROCESS WAS OVER BY 11.05.04 AND THE ASSESSING OFFI CER COULD HAVE EXAMINE THE SAID GENERAL MANAGER AFTER THE ELECTION WAS OVER AND COULD SEND HIS FINDING BY A SUPPLEMENTARY REPORT. HERE, THE ASSESSING OFFICER INTENTIONALLY FAILED TO CARRY OUT THE DIRECTIONS OF THE FIRST APPELLATE AUTHORITY WHICH WERE ISSUED IN THE INTEREST OF REVENUE. IN ABSENCE OF ANY SPECIFIC REPORT OF THE ASSESSING OFFICER, I HAVE NO ALTERNATIVE EXCEPT TO ACCEPT THA T THE GENERAL MANAGER OF DISTRICT INDUSTRIES CENTRE, SILVASSA WAS WELL WITHIN HIS POWERS TO AMEND THE CERTIFICATE AND WAS EMPOWERED T O MAKE IT ITA NOS.2264,2265,2266,2267/AHD/2005 & ITA NO.3047/AHD/2004 ITO VS. M/S.JAY PACKAGING ASST.YEARS 1998-99 TO 2000-01,2002-03 AND 2001-02 (RESPECTIVELY) - 6 - EFFECTIVE FROM 22.09.97. THE FIRST INGREDIENT (RE LIANCE ON DIC CERTIFICATE) OF THE FINDING OF THE ASSESSING OFFICE R IS ACCORDINGLY REJECTED. 4.1. THE LEARNED CIT(APPEALS) HAS ALSO EXAMINED THE FACTS IN RESPECT OF THE EXACT NUMBER OF WORKERS EMPLOYED BY THE ASSESSEE AND, THEREAFTER, GIVEN HIS FINDING ON FACTS VIDE PARAGRA PH NO.37 AS FOLLOWS:- 37. I HAVE ALSO EXAMINED THE CASE FROM THE ANGLE O F THE ASSESSING OFFICER, THOUGH IT WAS NOT REQUIRED AFTER THE ABOVE DISCUSSION. THE APPELLANTS COUNSEL HAS FILED FIVE AFFIDAVITS RELATING TO WORKERS IN ADDITION TO AS MENTIONED BY THE SUPERVISOR SHRI SANJIV KUMAR. THE ASSESSING OFFICER WAS REQUI RED TO EXAMINE THE AUTHENTICITY OF THE AFFIDAVITS. THOUG H THIS WAS AN ADDITIONAL EVIDENCE BUT THE ASSESSING OFFICER HAS N OT OBJECTED IT TO BE ADMITTED. IT IS NOT REQUIRED TO DECIDE THE CASE BUT FOR THE SAKE OF COMPARING THE CASE ON A WORST EVER SITUATION, I AM ADMITTING THIS ADDITIONAL EVIDENCE. THE ASSESSING OFFICER HA S EXAMINED ALL OF THE FIVE PERSONS WHO GAVE THE AFFIDAVITS. HE H AS RECORDED THEIR STATEMENTS IN GUJRATI AND COPIES WERE ENCLOSED WITH THE REPORT WITHOUT GIVING HIS FINDING. FROM THE STATEMENTS (R EAD OVER BY GUJRATI KNOWING EMPLOYEE), I NOTICED THAT SHRI MANO J NEPALI, SMT. PARVATIBEN, SHRI ASHOK PATEL AND SHRI DINESH PATEL WERE WORKING WITH THE APPELLANT FIRM DURING THE FY 2000-01 AND N OW THEY ARE NOT ON THE ROLL OF THE FIRM. THEY HAVE ADMITTED TH E DEPLOYMENT OF MORE THAN TEN WORKERS IN THE INDUSTRIAL UNDERTAKING OF THE APPELLANT. THEY HAVE LEFT THE JOB OF THE ASSESSEE FIRM. THE ASSESSING OFFICER HAS ADMITTED AT PARA-8.2 OF HIS O RDER THAT SHRI KAMLESH, SHRI SURJU SOREN, SHRI SHIVNATH, SHRI SANJ EEV, SHRI VINOD AND SMT. SANGITA WERE ON THE ROLL OF THE APPELLANT FIRM DURING THE FY 2000-01. SHRI MANOJ NEPALI, SMT. PARVATIBEN, SH RI ASHOK PATEL AND SHRI DINESH PATEL HAVE ADMITTED BEFORE TH E ASSESSING OFFICER IN THEIR STATEMENTS THAT THEY WERE WORKING WITH THE APPELLANT FIRM DURING THE FY 2000-01. THUS THE NU MBER OF ITA NOS.2264,2265,2266,2267/AHD/2005 & ITA NO.3047/AHD/2004 ITO VS. M/S.JAY PACKAGING ASST.YEARS 1998-99 TO 2000-01,2002-03 AND 2001-02 (RESPECTIVELY) - 7 - WORKERS DEPLOYED WILL BE ELEVEN INCLUDING THE SUPER VISOR SHRI SANJEEV KUMAR, NAMELY, 1. SHRI KAMLESH, 2. SHRI SUR JU SOREN, 3. SHRI SHIVNATH, 4. SHRI SANJEEV, 5.SHRI VINOD, 6. SM T.SANGITA, 7.SHRI MANOJ NEPALI, 8.SMT.PARVATIBEN, 9. SHRI AS HOK PATEL, 10.SHRI DINESH PATEL AND 11. SHRI SANJEEV KUMAR SUP ERVISOR. IF THE STATEMENTS OF THE PARTNER AND THE WORKERS ARE T AKEN IN TO ACCOUNT, THE COMMON NAMES OF THE WORKERS SHRI MOHME D YUSUF, SHRI DINESH, SHRI ASHOK AND SHRI SUNIL ARE APPEARIN G IN THE STATEMENTS OF SHRI JITENDRA KUMAR PARTNER AND IN TH E STATEMENTS OF WORKERS SHRI SUNIL AND SHRI MANOJ. IF, THE AFFIDAV ITS OF THE WORKERS PRODUCED DURING THE APPELLATE PROCEEDINGS A RE NOT CONSIDERED, THEN ALSO THE NUMBER OF WORKERS EMPLOYE D WILL BE MORE THAN TEN NAMELY, 1.SHRI KAMLESH, 2.SHRI SURJ U SOREN, 3.SHRI SHIVNATH, 4.SHRI SANJEEV, 5.SHRI VINOD, 6. SMT.SANGITA, 7.SHRI MOHMED YUSUF, 8.SHRI DINESH, 9.SHRI ASHOK , 10.SHRI SUNIL AND 11.SHRI SANJEEV KUMAR SUPERVISOR. THUS, IF TH E REPLY OF QUESTION NO.11, 12 AND 17 OF THE STATEMENT OF THE S UPERVISOR SHRI SANJEEV KUMAR DATED 29.09.03 IS TAKEN TO BE TRUE TH EN ALSO THE APPELLANT HAS DEPLOYED MORE THAN TEN WORKERS AND TH E CONDITION OF SECTION 80IB(2)(IV) OF THE ACT IS SATISFIED. AS SU CH, THE APPELLANT IS ENTITLED FOR THE DEDUCTION U/S.80IB OF THE I.T. ACT , 1961. 5. SINCE THE FIRST APPELLATE AUTHORITY HAS ALLOWED THE CLAIM OF DEDUCTION U/S.80IB(2)(IV) OF THE I.T. ACT, 1961, TH EREFORE, NOW THE REVENUE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD BOTH THE SIDES AND IN THE LIGHT OF COMPILATION-FILED EXAMINED THE FACTS OF THE CASE IN DEPTH. DURING T HE COURSE OF HEARING FROM THE SIDE OF THE RESPONDENT-ASSESSEE, THE PHOTO COPIES OF VARIOUS REGISTERS OF THE YEARS INVOLVED HAVE BEEN FURNISHED . IT HAS ALSO BEEN DEMONSTRATED THAT THE CERTIFICATE WHICH WAS EARLIER ISSUED BY THE DIC ITA NOS.2264,2265,2266,2267/AHD/2005 & ITA NO.3047/AHD/2004 ITO VS. M/S.JAY PACKAGING ASST.YEARS 1998-99 TO 2000-01,2002-03 AND 2001-02 (RESPECTIVELY) - 8 - DADRA NAGAR & HAVAELI, SILVASSA WAS DEFECTIVE WHIC H WAS LATER ON AMENDED AND THE SAID AMENDED CERTIFICATE HAS ALSO B EEN PLACED ON RECORD ON PAGES 96 TO 105 OF THE COMPILATION. IN ADDITION TO THESE TWO EVIDENCES, THE RESPONDENT HAS ALSO DRAWN OUR ATTENT ION ON THE REMAND REPORT DATED 14/05/2004, COPY OF THE SAME PLACED ON PAGE NOS.141 TO 146 IN THE COMPILATION TO DEMONSTRATE THAT AS PER T HE DIRECTIONS OF LEARNED CIT(APPEALS), THE FACTS HAVE BEEN RE-EXAMIN ED AND THE CONTENTIONS OF THE ASSESSEE WERE NOT DISCARDED. CO NSIDERING ALL THESE FACTS WE ARE OF THE VIEW THAT THE TWO REASONS ON TH E BASIS OF WHICH THE ASSESSING OFFICER HAS DISALLOWED THE CLAIM WERE CON CLUSIVELY DEMONSTRATED TO BE ILL-FOUNDED. THE CERTIFICATE OF THE DIRECTORATE OF INDUSTRIES WAS AMENDED THROUGH WHICH THE STRENGTH O F THE STAFF WAS CERTIFIED AS TWELVE (12) IN NUMBER. THE OTHER REASON FOR DISALLOWANCE IS THE NUMBER OF WORKERS AS STATED BY ONE OF THE SU PERVISOR OF THE FIRM. IN THIS CONTEXT, THE CONFUSION WAS ALLEGED TO BE MI SUNDERSTANDING OF THE LANGUAGE, HOWEVER TO OVERCOME THIS FALLACY OTHER E VIDENCES, SUCH AS, SALARY REGISTER, ETC. WERE PRODUCED BEFORE THE AUTH ORITIES BELOW AS AN CORROBORATIVE EVIDENCE. WE HAVE NOTED THAT VIDE P ARAGRAPH NO.3, THE LEARNED CIT(APPEALS) HAS GIVEN A CATEGORICAL FINDIN G THAT ONCE THE BOOKS OF ACCOUNT WERE AUDITED AND NOWHERE DURING TH E COURSE OF ASSESSMENT PROCEEDINGS THE AUTHENTICITY OF THE AUDI TED BOOKS OF ACCOUNT WERE CHALLENGED BY THE ASSESSING OFFICER, THEN HOW THE ASSESSING OFFICER HAD REJECTED THE SALARY EXPENDITURE AND HEL D THE SAME AS BOGUS CLAIM. OTHERWISE ALSO, WHETHER THE WORKERS WERE TE MPORARILY EMPLOYED ITA NOS.2264,2265,2266,2267/AHD/2005 & ITA NO.3047/AHD/2004 ITO VS. M/S.JAY PACKAGING ASST.YEARS 1998-99 TO 2000-01,2002-03 AND 2001-02 (RESPECTIVELY) - 9 - OR PERMANENTLY EMPLOYED, BUT IF THE NUMBER OF TOTAL WORKERS EXCEEDS THE PRESCRIBED NUMBER OF WORKERS, THEN THE LAW IN THIS REGARD IS CLEAR THAT THE ASSESSEE SHOULD BE ENTITLED FOR THE CLAIM OF DEDUCT ION U/S.80IB OF THE I.T. ACT, 1961. A REPORT OF A CHARTERED ENGINEER IS ALSO RELEVANT THROUGH WHICH IT WAS CERTIFIED THAT CONSIDERING THE NUMBER OF MACHINES, NATURE OF MANUFACTURING ACTIVITY, THE REQUIRED NUMBER OF MANPOWER SHOULD NOT BE LESS THAN THE WORKERS EMPLOYED BY THE ASSESSEE. RATHER, THE ASSESSING OFFICER WAS ASKED TO EXAMINE THE SAID REP ORT, BUT AS PER LEARNED CIT(APPEALS), THE ASSESSING OFFICER HAS AVO IDED TO EXAMINE CERTAIN FACTS. THEREFORE, LEARNED CIT(APPEALS) HA S STATED AT PARAGRAPH NO.34 THAT IN THE ABSENCE OF ANY FINDING FROM THE A SSESSING OFFICER HE HAD NO OTHER ALTERNATIVE BUT TO ACCEPT THE CONTENTI ON OF THE ASSESSEE THAT THE MACHINES IN QUESTION WERE USED WITH THE DEPLOYM ENT OF 10 OR MORE WORKERS. NOT ONLY THE ABOVE EVIDENCES WHICH WERE C ONSIDERED BY LEARNED CIT(APPEALS) BUT HE HAS ALSO ASKED THE ASSE SSEE TO QUOTE CERTAIN COMPARABLE CONCERNS ENGAGED IN THE SIMILAR TYPE OF MANUFACTURING ACTIVITIES. ON FURNISHING OF THE NAMES, THE ASSESS ING OFFICER WAS DIRECTED TO EXAMINE THE ASSESSMENT RECORDS OF THOSE CONCERNS. IT WAS ALSO ASKED TO FURNISH THE REPORT ABOUT THEIR TOTAL TURNO VER, NUMBER OF WORKERS EMPLOYED, LABOUR CHARGES INCURRED AND THE DETAILS I N RESPECT OF TEMPORARY WORKERS AND PERMANENT WORKERS EMPLOYED BY THEM. H OWEVER, NO INFORMATION WAS FURNISHED TO LEARNED CIT(APPEALS). THE LEARNED CIT(APPEALS) WAS VERY CRITICAL IN HIS REMARKS THAT THE ASSESSING OFFICER HAS NOT BOTHERED TO COMPLY CORRECTLY WITH THE DIREC TIONS AND AVOIDED THE ITA NOS.2264,2265,2266,2267/AHD/2005 & ITA NO.3047/AHD/2004 ITO VS. M/S.JAY PACKAGING ASST.YEARS 1998-99 TO 2000-01,2002-03 AND 2001-02 (RESPECTIVELY) - 10 - INFORMATION ASKED FOR, THEREFORE, CONSIDERING THE P RODUCTION SHOWN BY THE ASSESSEE, THE DEPLOYMENT OF WORKER OUGHT NOT TO BE LESS THAN THE PRESCRIBED NUMBER OF WORKERS. CONSIDERING ALL THE SE FACTS AND THE CORROBORATIVE EVIDENCES PLACED ON RECORD, WE FIND N O DECEITFULNESS IN THE FINDINGS ON FACTS GIVEN BY THE LEARNED CIT(APPEALS) . WITH THE RESULT, THIS GROUND OF THE REVENUE IS DISMISSED. 7. FOR ALL THE YEARS, THERE IS ONE MORE GROUND WHIC H IS IN RESPECT OF DISALLOWANCE OF SALARY AND WAGES TO THE WORKERS. 7. 1 THE SAID DISALLOWANCE OF SALARY/WAGES WAS ON ACCO UNT OF THE FACT THAT THE ASSESSING OFFICER HAS TAKEN A VIEW THAT TH E ASSESSEE HAS NOT EMPLOYED THE NUMBER OF WORKERS AS CLAIMED. WITH T HE RESULT, HE HAS PROPORTIONATELY DISALLOWED THE CLAIM OF EXPENDITURE ON SALARY/WAGES. ONCE WE HAVE TAKEN A VIEW IN THE FOREGOING PARAGRAP HS THAT THE NUMBER OF WORKERS/LABOURERS WERE TRULY AND CORRECTLY SHOWN BY THE ASSESSEE AND THOSE FACTS HAVE BEEN ELABORATELY ASCERTAINED BY TH E FIRST APPELLATE AUTHORITY, THEREFORE, THE CLAIM OF EXPENDITURE OUGH T TO BE ALLOWED. THE VIEW TAKEN BY THE LEARNED CIT(APPEALS) IS, THEREFOR E, AFFIRMED AND THEREFORE THIS GROUND OF THE REVENUE IS DISMISSED I N ALL THE YEARS. 8. FROM THE SIDE OF THE REVENUE, A GENERAL GROUND O F CONTRAVENTION OF RULE 46A OF THE I.T.RULES, 1962 HAS ALSO BEEN RAISE D BUT THIS GROUND HAS NO SUBSTANCE BECAUSE THE FIRST APPELLATE AUTHORITY HAS GIVEN SUFFICIENT ITA NOS.2264,2265,2266,2267/AHD/2005 & ITA NO.3047/AHD/2004 ITO VS. M/S.JAY PACKAGING ASST.YEARS 1998-99 TO 2000-01,2002-03 AND 2001-02 (RESPECTIVELY) - 11 - OPPORTUNITY TO THE REVENUE BY CALLING FOR THE REMAN D REPORT ON THE EVIDENCES AS WELL AS ON THE SUBMISSIONS OF THE ASSE SSEE, THEREFORE, DULY COMPLIED WITH THE CONDITIONS OF THE SAID RULE. ON E XAMINATION OF THE ORDER OF THE LEARNED CIT(APPEALS) AND AS PER SOME O F THE PARAGRAPHS REPRODUCED ABOVE, WE CAN HOLD THAT THERE IS NO FORC E IN THIS GROUND AS WELL. 9. IN THE RESULT, ALL THE APPEALS OF THE REVENUE AR E HEREBY DISMISSED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 30/ 07 /2010. SD/- SD/- ( D.C. AGRAWAL) ( MUKUL KR. SH RAWAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 30/ 07 /2010 T.C. NAIR, SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE DE PARTMENT. 3. THE CIT CONCERNED. 4. THE LD. CIT (APPEALS)-VALSAD 5. THE DR, AHMEDABAD BENCH. 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD