Attendance Register Recorded During Search ? v. Cit 214 Itr 801 Applies To The

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.1305 OF 2008 The CIT, Central-II, Mumbai )..Appellant V/s. Shri Rajesh Kapila, Mumbai )..Respondent ---- Mr.P.S.Sahadevan for the appellant. Mr.P.J.Pardiwala, Senior Counsel with Mr.A.K.Jasani for the respondent. ---- Coram : F.I.Rebello & R.S.Mohite,JJ Date : 16.02.2009. PC 1. The revenue has come in appeal on the following questions :- (i) Whether on the facts and in the circumstances of the case, the Hon’ble Tribunal was right in law in allowing the assessee’s claim of deduction u/s 80IB of Rs.1.85 crores when it was clearly established that the assessee failed to satisfy the conditions prescribed in that section relates to employment of minimum number of workers ? (ii) Whether on the facts and in the circumstances of the case, the Hon’ble Tribunal was right in law in preferring to rely on secondary evidence and discarding primary evidence in the form of attendance register recorded during search ? (iii) Whether on the facts and in the circumstances of the case, the Hon’ble Tribunal was right in law in failing to appreciate the clear findings of Ld CIT(A) and also failing to appreciate the judicial decision of the Hon’ble Supreme Court in the case of Sumati Dayal Vs. CIT 214 ITR 801 applies to the present case ? 2. In so far as question nos.(i) and (ii) are concerned, we find that the CIT(A) has recorded a : 2 : finding that the respondent-assessee had employed more than 10 workers. On behalf of the respondent-assessee, learned Counsel further submitted that the A.O. in respect of the wages paid to temporary employees had allowed the deduction. The submission of revenue is based on the fact that the names of the temporary employees were not shown in the attendance register. The requirement of section 80 IB (1) (iv) is that in case of undertaking where power is used the undertaking must employ ten or more workers. The section does not require that ten or more workers must be permanent employees. Merely because the names of such temporary employees were not there in the register maintained, would not result in holding that those employees are not workers for purpose of Section 80 IB (i) (ii) if otherwise, were employed. That is established by allowing the wages paid as expenditure. At the highest if the assessee Employer in such cases has not maintained a register or includes the names, such employer may be liable for any punitive action, if any for not including the name of such employee in the register. 3. CIT(A) proceeded on the footing that only the evidence in the form of wage register which is the primary evidence could be considered and secondary evidence could not have been considered. It sought to place reliance on the judgment of the Supreme : 3 : Court in the case of Sumati Dayal Vs. CIT reported in 214 ITR 801. The issue in Sumati Dayal (supra) was in respect of burden of proof. Contention raised was that substantial amount had been won in horsing race for two accounting years. On facts it was found that the assessee has not been able to establish the said fact. In our opinion, the ratio of the judgment would be of no assistance considering that the A.O. himself has allowed the expenditure towards salary for the temporary employees. 4. ITAT by its order considered the evidence and after noting the same held that the denial of deduction is not justified. 5. In our opinion, the finding of fact recorded by the Tribunal cannot be said to be perverse. As noted earlier the fact that names of the employees were not on the register cannot result in holding was in respect of burden of proof. Contention raised was that substantial amount had been won in horsing race for two accounting years. On facts it was found that the assessee has not been able to establish the said fact. In our opinion, the ratio of the judgment would be of no assistance considering that the A.O. himself has allowed the expenditure towards salary for the temporary employees. 4. ITAT by its order considered the evidence and after noting the same held that the denial of deduction is not justified. 5. In our opinion, the finding of fact recorded by the Tribunal cannot be said to be perverse. As noted earlier the fact that names of the employees were not on the register cannot result in holding that those employees were not employed. In the instant case, the A.O. allowed the expenditure salaries. The finding of the Tribunal therefore, is based on material available and it cannot be said that the finding is not supported by the evidence on record. 6. Considering the above, in our opinion, the questions as framed would not arise. Consequently, : 4 : appeal stands dismissed. (R.S.Mohite,J) (F.I.Rebello,J)