Contact us   Feedback   Annual Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (7) TMI 1117 - ITAT BANGALORE

2015 (7) TMI 1117 - ITAT BANGALORE - TMI - Deduction claimed u/s 80JJAA - CIT(A) allowed the claim - Held that:- As going by the plain language of the provision of section 80JJAA of the Act, it cannot be interpreted that for availing deduction under the said section on account of additional wages paid to new regular workmen employed for three assessment years commencing from the assessment year relevant to the previous year in which such employment is provided such workmen should continue in the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e as deduction in each of the subsequent two years. As we have already discussed in the facts emerging from the record, the AO has not disputed the completion of 300 days of employment by these new regular workmen employed by the assessee during the earlier two years and therefore, once the said condition is satisfied, the condition of continuity in employment does not emanate from the provisions of section 80JJAA of the Act. Accordingly, we do not find any reason to interfere with the impugned .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion of liability to income tax than the actual cost to the assessee shall be the amount which is determined by the AO having regard to all the circumstances of the case. In the case in hand, the AO did not undertake any exercise of examination of the valuation report produced by the assessee or to determine the actual cost of the assets to the assessee. - The AO has simply adopted the w.d.v. of the assets in the books of the seller being the actual cost to the assessee and consequently, rest .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Nos. 1231 to 1233(Bang) 2014 & C.O.Nos.19 to 21(Bang.)/2015 - Dated:- 24-7-2015 - SHRI ABRAHAM P GEORGE, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER Assessee by : Dr. K.Shankar Prasad,JCIT Revenue by : Shri H.N.Khincha, CA O R D E R PER BENCH: These appeals by the revenue and cross objection by the assessee are directed against three separate orders of the CIT(A) all dated 27-06-2014 for the assessment years 2007-08 to 2008-09 respectively. 2. The revenue has raised the following .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

o the new workmen employed during the year. 3. For these and other grounds that may be urged at the time of hearing, it is prayed that the order of the CIT(A) in so far as it relates to the above grounds may be reversed and that of the AO may be restored . 3. The assessee company is engaged in the business of manufacturing and sale of readymade garments. The assessee claimed deduction u/s 80JJAA of the Act, in respect of the employment of new workmen. Assessee has given the details of the additi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

al wages paid in the preceding two years was also claimed. The AO observed that this working and interpretation of Section cannot be accepted. The AO was of the view that the wages paid in the relevant previous years was alone to be taken into consideration but not the wages paid in the preceding year for computing the deduction allowable in this year. The AO was of the view that if the new workmen employed during earlier two years continue in this year, the wages paid to them constitute additio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e year. Therefore, no additional wages were paid in this year to workmen employed in the preceding two years and question of allowing deduction for additional wages paid in the preceding year does not arise. The AO held that the assessee is eligible for deduction on additional wages paid to new workmen employed during this year only. Accordingly, the AO restricted the deduction claimed u/s 80JJAA to ₹ 26,37,638/- only, as against claim of ₹ 53,10,703/-. The assessee challenged the ac .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ssessee placed reliance on the decision of the co-ordinate bench of this Tribunal in the case of ACIT Vs M/s Texas Instruments Pvt.Ltd., 27 SOT 72. The assessee explained that the deduction has been claimed in respect of the additional wages paid to the newly employed workmen during the preceding two years who have worked for 300 days or more. Therefore, the assessee fulfilled the requisite conditions as provided u/s 80JJAA of the Act. The CIT(A) accepted the claim of the assessee and held that .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

st two years were not in the employment of the assessee during the year under consideration. However, the assessee has claimed the deduction of 30% of additional wages paid to those workers in the preceding two years and not during the year under consideration. The AO had disallowed the claim of the assessee of deduction of 30% of additional wages which was not paid during the year under consideration. He has forcefully contended that the spirit of section is to allow the deduction against addit .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lied upon the order of the AO. 6. On the other hand, learned AR submitted that the AO has not disputed that the additional wages paid by the assessee in the earlier two years in respect of new workmen employed and worked for 300 days. Therefore, the assesee has fulfilled the condition required u/s 80JJAA under which the criteria for claiming the deduction is new regular workmen employed by the assessee worked at last for 300 days. There is no condition under the provisions that these new workmen .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

is employed by the assessee during the previous year s fulfilled than the deduction of 30% shall be available in each of the three years, commencing from assessment year relevant to the previous year in which such employment is provided by the assessee. He has relied on the following decisions; 1. ACIT Vs Texas instruments (Ind.)Pvt.Ltd(2009) 27 SOT 72(Bang.) 2. OnMobile Global Ltd Vs Addl.CIT(2014) 45 Taxman.com 346 (B lore-Trib). 3. Honeywell Tech. Solutions L:ab(P)Ltd Vs DCIT(2013) 35 taxmann .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y industrial undertakings engaged in the manufacture or production of article or thing, there shall, subject to the conditions specified in subsection(2), be allowed a deduction of an amount equal to thirty percent of additional wages paid to the new regular workmen employed by the assessee in the previous year for three assessment years including the assessment year relevant to the previous year in which such employment is provided. a) if the industrial undertaking is formed by splitting up or .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

previous year; Provided….that in the case of an existing undertaking, the additional wages shall be nil if the increase in the number of regular workmen employed during the year is less than ten percent of existing number of workmen employed in such undertaking as on the last day of the preceding year; ii) regular workmen does not include- a) a casual workmen; or b) a workman employed through contract labour; or c) any other workman employed for a period of less than three hundred days d .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ia to be fulfilled for availing the special deduction u/s 80JJAa of the Act, however, the issue before us in the case of the assessee is confined only with respect to the question whether such special deduction is allowable to the assessee even if the new workmen employed by the assessee and worked for 300 daysbut ceased to be the workmen of the assessee for the subsequent assessment year. The claim of the assessee is that once the condition as prescribed u/s 80JJAA of the Act is fulfilled in th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

as the learned DR the assessee is entitled for deduction of 30% additional wage paid during the year to the new regular workmen employed by the assessee during the year as well as in the earlier two years. Hence, as per the revenue the deduction is available equivalent to 30% of the wages paid during the year and not as a standard deduction of the wages paid in the earlier years. Though, we find a logic in the argument of the learned DR that the deduction u/s 80JJAAx is allowable on an amount eq .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sessment year relevant to the previous year in which such employment is provided. The provisions of fiscal statute are required to be strictly interpreted as per the language employed in the section. There is no scope of reading something into the provisions of fiscal statute therefore, even if there is a lacuna in the drafting or language of the provision the same has to be rectified by the legislation. Thus, going by the plain language of the provision of section 80JJAA of the Act, it cannot b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Therefore, the expression additional wages paid to new workmen employed by the assessee in the previous year is the criteria to be fulfilled and to be tested in the first year of the claim of deduction and once deduction is allowable in the first year then, 30% of such additional wages is allowable as deduction in each of the subsequent two years. As we have already discussed in the facts emerging from the record, the AO has not disputed the completion of 300 days of employment by these new regu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e issue raised by the revenue for the assessment year 2008-09 and 2009-10 has been disposed of in the same terms. 10. In the cross objection the assessee has raised common grounds which reads as under; 1. The ld.AO has erred in invoking the provisions of explanation 3 to sec.43(1) of the Act and disallowing the depreciation claimed by the appellant on the assets purchased from M/s Trigen Apparels Ltd., and the ld.CIT(A) has erred in confirming the same. On proper appreciation of facts, the appel .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

me is to be allowed as such.ost the disallowance is erroneous and is liable to be deleted. 4. In view of the above and on other grounds to be adduced at the time of hearing it is requested that the disallowance as made by invoking explanation 3 to sec.43(1) of the Act is to be deleted . 11. During the previous year relevant to AY: 2007-08, the assessee purchased various fixed assets worth ₹ 2,21,81,957/- from its sister concern M/s treason Apparels Pvt.Ltd., out of the said purchase the pl .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d the depreciation on the balance amount of ₹ 55,57,222/-. The assessee challenged the action of the AO before the CIT(A), but could not succeed. 12. Before us, learned AR of the assessee submitted that valuation of the fixed asset is based on valuation report dated 20-03-2007 of M/s Kulkarni & Associates, charter Engineers and approved valuer. The valuation was carried out by the professional valuer after taking into due consideration of depreciation, working condition of machine and .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

upon the following decisions; 1. Nirma Industries(P)LTd Vs DCIT (2013) Taxmann.com 89 (Ahmd.-Trib) 2. Ashwin Vanaspati Industries Vs CIT(2002) 125 Taxman.59(Guj.) (2002) 255 ITR 26 (Guj.) (2002) 174 CTR 90(GUj.) 3. ACUIT Vs Vinod Kumar Agarwal(2002) 82 ITD 1 (Hyd/(2002) 77 TTJ 943(Hyd.) 13. On the other hand, the learned DR submitted that the w.d.v. in the books of the seller is a tangible material before the AO on the basis on which the AO has determined the actual cost of the asset to the ass .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e from M/s Treason Apparels Pvt. Ltd. which was stated to be family concern of the Directors of the assessee company, as observed by the AO. The AO invoked the Explanation-3 to provisions of sec.43(1) which reads as under; 43(1) In sections 28 to41and in this section, unless the context otherwise requires;- actual cost" means the actual cost of the assets to the assessee, reduced by that portion of the cost thereof, if any, as has been met directly or indirectly by any other person or autho .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

by the assessee, the assets were at any time used by any other person for the purposes of his business or profession and the 5 Assessing] Officer is satisfied that the main purpose of the transfer of such assets, directly or indirectly to the assessee, was the reduction of a liability to income- tax (by claiming depreciation with reference to an enhanced cost), the actual cost to the assessee shall be such an amount as the 6 Assessing] Officer may, with the previous approval of the 7 Deputy] Com .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version