1. This appeal by the assessee reiterates the claim for deduction under Section 80-1 of the Income-tax Act, 1961 ('the Act'). The admitted facts are that the assessee carries on the business of manufacturing polythene bags and in the course of such business, it gets the polythene bags stitched by an outside agency. The Commissioner (Appeals) accepted the contention of the assessee that the assessee was engaged in the manufacture of an article though it gets it done through others, thus, fulfilling one of the conditions for the deduction. But he was of the view that the other condition, viz., that it employs 10 or more workers in a manufacturing process carried on with the aid of power was not fulfilled and, therefore, the assessee was not entitled to the deduction. The assessee relied on the decision in the case of Kapri International (P.) Ltd. v. ITO  8 ITD 820 (Delhi) (SB) to contend that where the manufacturing process is being carried on through an agency as permissible under the section, the employees of the agency should also be considered as the employees of the assessee.
We find that the decision cited does not support that contention because in that case, full details were not supplied by the assessee about various artisans, who were paid wages and who were carrying on the manufacturing process on behalf of the assessee and the matter was remitted to the ITO to ascertain the actual activity of the assessee.
In the present case, admittedly, the assessee does not pay any wages to any one who is engaged in the manufacturing process on behalf of the assessee. Therefore, it cannot be said that the assessee employs 10 or more workers in a manufacturing process as required by the section. The workmen employed by an agency of the assessee, which may itself be a different industrial undertaking, cannot be regarded as the workmen of the assessee for the purposes of this section because the object of this section is to encourage setting up of . an industrial undertaking which will be defeated if the employees of others are to be treated as the employees of the assessee. We, therefore, agree with the authorities below that the assessee was not entitled to the deduction claimed. The appeal is dismissed.