9911796707
|
Home
Issues involved: Interpretation of Section 80-IA (2) (v) of the Income Tax Act, 1961 regarding the employment requirements for exemption.
The main issue in the judgment was the interpretation of Section 80-IA (2) (v) of the Income Tax Act, 1961, which pertains to the employment criteria for exemption. The question raised was whether the Tribunal was correct in holding that a substantial number of workers must be employed for the entire year or a significant part of the year to qualify for exemption under this section. Additionally, it was questioned whether an appellant, who had employed more than ten workers for a portion of the year but could not meet the minimum requirement for the remaining period due to lack of orders, was entitled to exemption under Section 80-IA. The court noted that in both appeals, the number of workers employed for the specified period did not meet the criteria set out in Section 80-IA (2) (v). It was emphasized that employment for only two or six months could not be considered as employment for a substantial part of the year, as required by the provision. Referring to a judgment by the Delhi High Court in Commissioner of Income Tax versus Taluja Enterprises (P.) Ltd., the court highlighted that substantial compliance with the employment requirement is necessary for claiming relief under the Income Tax Act. The court clarified that there is no fixed rule to determine substantial compliance, and it must be assessed based on the specific circumstances of each case. The court further explained that while a substantial part of the year does not necessarily mean the entire year, employment for a fraction of the year such as 1/6th or half cannot be considered as fulfilling the requirement of substantial employment for the year. Consequently, the appeals were dismissed, and the questions of law were decided against the assessee and in favor of the Revenue, with no costs awarded.
|
