Taxpublishers.in - InterestingDecision/Flash_128.htm - Tax Publishers Your Tax Solution Hub

Share via Whatsapp 188 Views


Tax Publishers Tata Elxsi Ltd. v. Jt. CIT [ITA No. 3445/Bang/2018, dt. 29-10-2020] : 2020 TaxPub(DT) 4556 (Bang-Trib) Denial of deduction under section 80JJAA in 3rd year subsequent to recruitment year of new employees citing employees working for less than 300 days in first year - retrospective reading of 4th proviso in section 80JJAA *Facts:* Assessee claimed deduction under section 80JJAA in the assessment year 2014-15 which was the third year of recruitment of new employees. Revenue denied it citing that the new employees did not meet the threshold cut off of 300 days as per the section in the first year. On higher appeal - Held in favour of the assessee that they were entitled to the deduction under section 80JJAA. The 300 day rule if applied in the first year of new recruitment will lead to absurdity resulting in denial of the deduction and with no purposive interpretation of the section. *Applied:* Texas Instruments (India) Pvt. Ltd. v. ACIT (2020) 115 taxmann.com 154 (Bang-Trib) : 2020 TaxPub(DT) 2145 (Bang-Trib). *Editorial Note:* Amendment made in section 80JJAA(2) by inserting 4th proviso vide Finance Act, 2018 with effect from 1-4-2019 may need to be read retrospective to make the section workable despite below wording of section 80JJAA(3). "The provisions of this section, as they stood immediately prior to their amendment by the Finance Act, 2016 shall apply to an assessee eligible to claim any deduction for any assessment year commencing on or before the 1-4-2016". The number of days is now reduced from 300 to 240 is also to be noted.

Tax Publishers

Tata Elxsi Ltd. v. Jt. CIT [ITA No. 3445/Bang/2018, dt. 29-10-2020] : 2020 TaxPub(DT) 4556 (Bang-Trib)

Denial of deduction under section 80JJAA in 3rd year subsequent to recruitment year of new employees citing employees working for less than 300 days in first year - retrospective reading of 4th proviso in section 80JJAA

Facts:

Assessee claimed deduction under section 80JJAA in the assessment year 2014-15 which was the third year of recruitment of new employees. Revenue denied it citing that the new employees did not meet the threshold cut off of 300 days as per the section in the first year. On higher appeal -

Held in favour of the assessee that they were entitled to the deduction under section 80JJAA.

The 300 day rule if applied in the first year of new recruitment will lead to absurdity resulting in denial of the deduction and with no purposive interpretation of the section.

Applied: Texas Instruments (India) Pvt. Ltd. v. ACIT (2020) 115 taxmann.com 154 (Bang-Trib) : 2020 TaxPub(DT) 2145 (Bang-Trib).

Editorial Note:

Amendment made in section 80JJAA(2) by inserting 4th proviso vide Finance Act, 2018 with effect from 1-4-2019 may need to be read retrospective to make the section workable despite below wording of section 80JJAA(3).

"The provisions of this section, as they stood immediately prior to their amendment by the Finance Act, 2016 shall apply to an assessee eligible to claim any deduction for any assessment year commencing on or before the 1-4-2016".

The number of days is now reduced from 300 to 240 is also to be noted.