2009 (12) TMI 1051 - AT - Income Tax

Summary

Issues involved: Appeal against order u/s.263 by Commissioner of Income-tax regarding excess deduction under section 80JJAA for Assessment Year 2006-07.

The Appellate Tribunal ITAT Bangalore heard an appeal by the assessee against the order passed u/s.263 by the Commissioner of Income-tax, Bangalore -III, Bangalore for the Assessment Year 2006-07. The Commissioner had noted that the assessee had paid additional wages of Rs.60,30,143 and was eligible for a deduction of 30% u/s 80JJAA of the Income tax Act, 1961, amounting to Rs.18,09,043. However, an excess deduction of Rs.32,46,618 was allowed, leading to a direction to disallow the excess deduction of Rs.14,37,575. The Commissioner held the Assessing Officer's order as erroneous and prejudicial to the interests of revenue.

In response, the assessee contended that it was entitled to the claim of 30% deduction and had claimed only that amount, refuting the existence of any excess deduction. The assessee specified deductions claimed for different assessment years and argued that as per section 80JJAA, a deduction equal to 30% of additional wages paid to regular workers was permissible. The Tribunal noted a previous order in a similar case where the Tribunal had ruled in favor of the assessee. Consequently, the appeal by the assessee was allowed, overturning the Commissioner's order.

In conclusion, the Appellate Tribunal ITAT Bangalore allowed the appeal by the assessee against the order u/s.263 by the Commissioner of Income-tax, setting aside the disallowance of excess deduction under section 80JJAA for the Assessment Year 2006-07.