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Issues involved: Appeal by revenue related to assessment year 2005-06 challenging the allowance of relief u/s 80JJAA of the IT Act, 1961 for software engineers not falling under the category of 'workers' under the Industrial Disputes Act, 1947.
Summary: Issue 1: The revenue challenged the order of the ld. CIT(A) as prejudicial to the revenue, opposing law and facts of the case. Issue 2: The ld. CIT(A) allowed relief u/s 80JJAA, holding that the assessee satisfied all conditions for claiming the deduction. Issue 3: The contention was that the employees claimed for deduction u/s 80JJAA were software engineers, not falling under the category of 'workers' under the Industrial Disputes Act, 1947. Issue 4: It was argued that only workers earning less than &8377; 1600/- p.m are considered workers under the Industrial Disputes Act, 1947. In the case, the assessee, engaged in the business of design, manufacture, and export of computer software, claimed a deduction u/s 80JJAA of &8377; 11,17,72,181/-. The AO disallowed the deduction stating that the employees, being software engineers, did not qualify as 'workmen' under the Industrial Disputes Act, 1947, and hence, the deduction was not applicable. The AO referred to a previous Tribunal decision but found it unacceptable due to pending appeal in the High Court. On appeal, the CIT(A) directed the AO to reconsider the deduction for employees working less than 300 days in the previous year, following the Tribunal's decision in the assessee's favor for earlier years. The Tribunal upheld the CIT(A)'s decision, emphasizing that the Tribunal's order retains precedential value despite the pending appeal in the High Court. Therefore, the revenue's appeal was dismissed, affirming the allowance of relief u/s 80JJAA for the assessee's software engineers.
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