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2023 (9) TMI 258 - HC - Income TaxDeduction u/s 80JJAA - computation of number of days 300 days or more for new regular workman is to be employed - Period of 300 days should fall within the same Finacial Year or May fall within two FYs for consecutive period? - HELD THAT - Section 80JJ-AA is an incentive extended to the industries. Parliament has subsequently amended the period of 300 days to 240 days in case of other industries and 150 days in the case of apparel industries, by inserting a proviso with effect from 01.04.2017 In Texas Instruments 2021 (4) TMI 1049 - KARNATAKA HIGH COURT this court has held that if an employer were to have the workmen on or after 5th June, he would not be entitled for claiming the benefit. It is also noted that in another similar case, Bosch Ltd, 2016 (11) TMI 375 - ITAT BANGALORE ITAT has held that the assessee therein was entitled to the benefit of the said provision so long as employee had worked for 300 days, even if the said period was split into two blocks namely, assessment year or financial year. After considering the aspect of working for 300 days in the previous year, this Court in Texas Instruments has held that period of 300 days could be taken into consideration both in the previous and succeeding years for the purpose of availing the benefit u/s 80JJAA of the Act and it is not required that workmen works for 300 days in the previous year relevant to assessment year. Thus the order passed by the A.O. and confirmed by the appellate authorities is unsustainable in law - Decided in favour of assessee.
Issues involved:
The judgment involves appeals challenging orders related to the assessment years 2013-14, 2015-16, 2016-17, and 2014-15 passed by the Income Tax Appellate Tribunal. Issue 1: Entitlement of deduction under Section 80JJAA of the Income Tax Act The appellant, engaged in manufacturing apparels, claimed deduction under Section 80JJAA of the Act for employing workmen. The Assessing Officer (A.O.) denied the benefit, stating the workmen were not employed for 300 days in the previous year. The Commissioner of Income Tax (Appeals) and ITAT upheld this view. The appellant argued that a restrictive interpretation of Section 80JJAA would lead to denial of deduction for employees employed after a specific date. Citing precedent, the appellant contended that the 300-day requirement should not be limited to the previous year relevant to the assessment year. The Revenue insisted on strict compliance with the statutory provision, emphasizing the need for employees to work 300 days. The Court held that the period of 300 days need not be fulfilled in the previous year for claiming the deduction under Section 80JJAA. Issue 2: Interpretation of 'regular workmen' under Section 80JJAA The appellant highlighted that the term 'new' in Section 80JJAA distinguishes between existing employees and newly employed workmen. The Revenue's stance that employees must work 300 days in the year before the assessment year was deemed legally unsustainable. The Court noted that the Act was amended to reduce the employment period requirement for different industries. Referring to previous cases, it was established that the benefit under Section 80JJAA could be claimed if the employee worked for 300 days, even if the period spanned across assessment or financial years. The Court ruled in favor of the appellant, stating that the orders of the A.O. and appellate authorities were legally unsustainable. Separate Judgment by the Judges: The Judges allowed the appeals, setting aside the orders of the ITAT for the respective assessment years and answering the questions of law in favor of the assessee against the revenue, with no costs imposed.
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