INCOME TAX-OFFICER vs. SHRI FABS

These are the appeals, whereby, the appellant-Revenue seeks to challenge the order passed by the ITAT, Ahmedabad Bench, Ahmedabad (for short, ‘the Tribunal), Dated : 15.02.2001, rendered in ITA No.3267/Ahd/1995 for the A.Y.- 1987-88, ITA No.3263/Ahd/1995 for the A.Y.-1991- 92, ITA No.3264/Ahd/1995 for the A.Y.-1988-89, ITA No.3266/Ahd/1995 for the A.Y.-1990-91, ITA No.3265/Ahd/1995 for the A.Y.-1989-90, ITA No.3262/Ahd/1995 for the A.Y.-1986-87, whereby, the Tribunal dismissed the appeals preferred by the appellant-revenue.

The brief facts of the case are that the respondent-assessee filed its returns of income for different assessment years, wherein, it claimed deduction under Section 80HHA and 80I of the Income Tax Act, 1961 (for short, ‘the Act’). The appellant-Revenue, hence, requested the respondent-assessee to supply the material in support of its claim for deductiona, as above. According to the appellant-revenue, the respondent-assessee did not supply the necessary material. Therefore, the concerned AO disallowed the claim of the respondent-assessee for the relevant assessment years. Being aggrieved thereby, the respondent-assessee approached the CIT(A) by filing different appeals and the CIT(A) allowed the appeals of the respondent-assessee for the A.Y.s- 1986-87 and 1991-92. Since, the appellant-revenue was no satisfied with the order passed by the CIT(A), it challenged the same before the Tribunal, which, passed the impugned common order. Hence, the appellant-revenue preferred the present appeals, raising the following common question of law for the consideration of this Court; “Whether, the Appellate Tribunal is right in law and on facts in allowing the relief to the assessee under Section 80I and 80HHA on the ground that workers of the contractor

At the very outset, Mr. Parikh, learned Advocate for the appellant-revenue, and Mr. Soparkar, learned Advocate for the respondent- assessee, invited our attention to a decision of the Division Bench of this Court in ITR No.3 of 1999 in the case of “COMMISSIONER OF INCOME TAX VS. VIKSHRA TRADING & INVESTMENT LTD.”, wherein, the Division Bench, at Paras-8 and 9, has observed as under; “8. Section 80I of the Act provides for granting a deduction from profits and gains at a specified percentage in a case where the gross total income of an assessee includes such profits and gains derived from an industrial undertaking which fulfills the conditions laid down in the section. Under sub-section (2) of section 80I of the Act four different conditions are stipulated. Condition vide Clause No.(iii) of sub-section (2) of section 80I of the Act stipulates that the industrial

Explanation (b) which defines small-scale

In the case on hand also, from the record it appears that the AO did not take into account the workers of the contractor employed in the manufacturing activity at the time of passing the assessment order. Therefore, the Tribunal, while passing the impugned order recorded that the CIT(A) was justified in holding that the workers of the contractor employed in manufacturing activities are also to be taken into account for the purpose of granting benefit under Section 80HHA and 80I of the Act. The Tribunal, further, recorded that the respondent- assessee had produced sufficient material to show that the number of workers exceeds more than 10 during all the relevant assessment years. Thus,

In the result, all the appeals fail and are DISMISSED. No order as to costs. (K.S.JHAVERI, J.) (K.J.THAKER, J) UMESH