TaxTMI 
TaxTMI 
2020 (11) TMI 274
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....) has erred in confirming the said disallowance. On facts and circumstances of the case and law applicable, the impugned disallowance should be deleted in entirety. 3.1. In view of the above and other grounds to be adduced at the time of hearing, the appellant company prays that the order passed by the learned Commissioner of Income tax (Appeals) 7, in so far it is prejudicial to the appellant, be quashed Or in the alternative (i) Deduction under section 80JJAA be allowed as claimed in the return of income; (ii) Deduction in respect of share of loss from A2E2, USA be allowed as claimed in the return of income. Brief facts of the case are as under: 2. Assessee is a company engaged in the business of distributed systems, design and development of hardware and software and digital content creation. It filed its return of income for year under consideration on 29/11/2012 declaring total income of Rs. 26,38,79,760/-. The case was selected for scrutiny and notice under section 143(2) and 142(1) of the Act were issued. 2.1. During the scrutiny proceedings Ld.AO noticed that assessee claimed deduction of Rs. 8,93,19,981/-under section 80JJAA of the Act. ....
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.... 80JJAA of the Act, that defines 'Industry' as under: Industry means any business, trade, undertaking, manufacture or calling of employers and includes all calling, service, employment, handicraft or industrial occupation or revocation of workmen." 4.2. He also submitted that the term "article or things" is not defined in the income tax act and they must be understood with reference to the context. Ld.AR placed reliance on decision of coordinate bench of this Tribunal in case of Texas Instruments (India) Pvt.Ltd vs ACIT reported in (2020) 115 Taxmann.com 154, wherein, the issue regarding, whether, employees employed in software industries could be regarded as workmen has been considered in this case wherein this tribunal held that software industry has also been notified as industry for purpose of Industrial Disputes Act, 1947, by state of Karnataka, and that, the employees employed in the software development industry rendered technical services and not services in the nature of supervisory or management character. 4.3. Ld.AR submitted that, this is the 3rd year of claim by assessee and that the employees against whose wages the deduction has been claimed satisfies the ne....
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.... stand on claim for similar deduction u/s.80JJAA of the Act in AY 2007-08. In the order of assessment passed by the AO for AY 2007-08, he has while disallowing the claim for deduction u/s.80JJAA of the Act for that AY, accepted the position that on additional wages paid to new workmen employed during the previous year relevant to AY 2005-06 who have worked more than 300 days during the previous year relevant to AY 2007- 08, the Assessee is entitled to deduction u/s.80JJAA of the Act. In the decision rendered in the case of Bosch Ltd. (supra) the Bangalore ITAT at paragraph 23 of the aforesaid order the Tribunal observed that the deduction u/s.80JJAA of the Act is allowed for three years including the year in which the employment is provided. Hence, in each year it has to be seen that the workmen was employed for at least 300 days during that previous year and that such workmen was not a casual workmen or workmen employed through contract labour. Therefore, if some workmen were employed for a period of less than 300 days in the previous year then no deduction is allowable in respect of payment of wages to such work men in the present year even if such workmen was employed i....
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....made by assessee under section 80JJAA of the Act. Ld.AO is then directed to allow deduction under section 80 JJAA of the Act. Accordingly this ground raised by assessee stands allowed for statistical purposes. 6. Ground number 2.1 is in respect of not allowing the loss claimed in respect of assessee's share from A2E2 amounting to Rs. 4,11,75,000/- that was claimed during assessment proceedings. At the outset, both parties admit that various details in respect of the claim has not been verified by Ld.AO as the same was made by way of submissions during assessment proceedings. 6.1. Brief facts as has been submitted by assessee in respect of this issue is that assessee entered into a joint venture agreement with M/s.A Squad Entertainment LLC having its headquarters at California, USA. It has been submitted that the joint venture was for the purpose of creating venture companies named A2E2 which was incorporated as per the law is off USA on 16/06/2011. It has been submitted that in terms of the agreement share holding of assessee with A2E2 would be the paid-up equity capital amounting to USD 2 million comprising of 2 million shares of USD 1 each. Assessee had agreed to pay ....