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Issues involved:
The only issue in this case pertains to the claim of the assessee u/s 80-I of the Income-tax Act, 1961. Summary: 1. The assessee, a partnership firm engaged in printing and art work, sought exemption u/s 80-I for the assessment year 1984-85. The claim was rejected by the Assessing Officer based on non-satisfaction of conditions in the initial year and reliance on work done by outside parties. The CIT(A) upheld this decision, citing precedent. The assessee appealed to the Tribunal. 2. The assessee argued that the condition of employing 10 or more workers should be assessed annually, citing a Gujarat High Court decision. They contended that the Bombay High Court precedent relied upon was distinguishable. The revenue supported the lower authorities' decisions. 3. The Tribunal noted that section 80-I is a beneficial provision promoting economic growth, to be interpreted liberally. It analyzed the conditions of the section, emphasizing that the first two conditions must be met in the initial year, while the latter two should be met annually to avoid absurd outcomes. 4. Three propositions were considered regarding the continuity of conditions over the eight-year block period. The Tribunal found the revenue's proposition impractical and the assessee's proposition reasonable, aligning with legislative intent to incentivize employment. 5. The Tribunal drew support from a Gujarat High Court judgment on a similar provision. It clarified that the block period mentioned in sub-section (5) does not restrict condition fulfillment to the initial year only. 6. The Tribunal distinguished the Bombay High Court judgment relied upon by the CIT(A), as it pertained to different conditions. It declined to address a second reasoning of the Assessing Officer due to lack of a cross appeal. 7. Ultimately, the Tribunal set aside the CIT(A)'s order and directed the Assessing Officer to allow the assessee's claim u/s 80-I. The appeal of the assessee was allowed.
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