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Is wages admissable

Ramakrishnan (Student) (81 Points)

04 December 2012

Hi frnds., i hav 1 doubt in I.T tht s..! If an factory carrying manufacturing process paid salary to workers @ piece rate method.. In dis situation can d factory claim tht wages as "Admissible wages" OR "admissible expenses" to manufacture - because of definition for salary 'Employer-Employee relationship' 2nd thing Is the factory can claim benefit U/S 80JJAA in subsequent years as per rules in said sec., - Bcos doesn't say anything if piece rated... Only said as Regular/300days/No employed under contracted person... CLEAR ME!!

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5 Replies

Ramakrishna Kamat (CA) (76 Points)
Replied 04 December 2012

It can not be said that whenever payment is made by piece rate, there is no relationship of employer and the employee. Taking into account factors like element of control, supervision etc you have to decide if there is a relationship of employer and employee or principal and independent contractor.

Explanation to section 80JJA A explains that the word "workman" shall have the meaning assigned to it in clause (s) of section 2 of the Industrial Disputes Act, 1947. Please refer to this section and also to the judgement of Supreme Court in Shining Tailors vs Industrial Tribunal II UP -AIR 1984 SC 23, 1983 LablC 1509, (1983) IILLJ 413 SC where it was held that piece rated tailors working in big tailoring establishment are workmen

Ramakrishnan (Student) (81 Points)
Replied 04 December 2012

Thanx Ramakrishna kamat.. I understand it well.. 1 clarification pls.,in the above 1st said situation if d the factory paid piece rated wages to 1 of its employee who acts as employer (Jst ACTS like sub/contractor) bt mgmt of workers,control and supervision vested vid factory means...How v dealt dis..Advance Thanx

Ramakrishnan (Student) (81 Points)
Replied 05 December 2012

Dear Ramakrishna Kamat., I can't able search the said case law in the below web even in Google also... So can u give me d link means vl helpful 2 me.... https://www.lexsite.com/indexpage/IndexYearlist.php?cat=SC%20Cases&catid=4&sdid=10&lCrtId=0&lJurisId=&yr=1984&sdoc=Judgement&page=2...... Shining Tailors vs Industrial Tribunal II UP -AIR 1984 SC 23, 1983 LablC 1509, (1983) IILLJ 413 SC

Ramakrishna Kamat (CA) (76 Points)
Replied 05 December 2012

You will get it if you search in google... No need to mention the citation..

Ramakrishnan (Student) (81 Points)
Replied 06 December 2012

Hmm k..,Where did u studied tht case law in books'ah?..I vl try to get it in google...i request u pls clarify d above query i mean ven d control vid factory bt it pays to only 1employee who acts as sub-contractor 2 other employees @ piece rated payments..