TaxTMI 
TaxTMI 
2021 (8) TMI 426
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....wance of deduction claimed u/s. 80JJA of the Income-tax Act, 1961 [the Act]. 3. He further submitted that for the AY 2008-09 cross appeals are filed. The issue of deduction u/s. 80JJA of the Act arises out of the Revenue's appeal in ITA No.1175/B/2012 and hence the assessee's appeal in ITA No.1163/Bang/202 is infructuous for the issue under consideration. Being so, the assessee's appeal in ITA No.1163/Bang/2012 for AY 2009-09 is dismissed as infructuous in the above circumstances. 4. We now take up for consideration the revenue's appeal for AY 2008- 09. The cross appeals had originally come for consideration before the Tribunal. The brief facts of the case were that the assessee claimed an amount of Rs. 48,30,929 as deduction u/s. 80JJA of the Act. Certificate in Form10DA was submitted. The existing no. of employees was 81 and 49 new employees. The AO disallowed this claim of assessee on the ground that the asse does not qualify as industrial undertaking and employees earning high salaries are construed as employees of managerial nature. The CIT(Appeals) deleted the additions and allowed the appeal of assessee. The Tribunal disposed of the appeal vide order dated 21.12.....
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....001-02 & 2002-03 for consideration of two issues as under:- (i) Whether IT company / engineers are eligible for deduction u/s. 80JJA. (ii) Whether the deduction is allowable if the employees are employed for less than 300 days in any previous year. 6. In Texas Instruments (India) P. Ltd.'s case, the Hon'ble High Court remanded the second issue back to the Tribunal for reconsideration and kept the first issue open to be raised if it goes against the revenue. In pursuance of the remand, the Tribunal passed order dated 29.12.2016 holding the second issue of 'employees employed less than 300 days' against the assessee. The first issue remained unadjudicated. Against this order of the Tribunal, the assessee therein, i.e., Texas Instruments (India) P. Ltd. moved in appeal to the High Court. During the pendency of the appeal, it appears Texas Instruments (India) P. Ltd. opted for VSV Scheme, 2020 and prayed for withdrawal of appeals. The Hon'ble High Court in ITA No.300 of 2017 by order dated 02.02.2021 dismissed these appeals as withdrawn. It is in these circumstances that the adjudication of the issue u/s. 80JJA of the Act was kept open for adjudication by the Hon'b....
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.... The issue raised by the Revenue is that the employees of the Assessee would not come within the purview of the definition of workman under Section 2(2) of the industrial Disputes Act, 1947 (for short 'ID Act') and that since the employee has riot completed 300 days of employment in the previous year, no deduction could be claimed by the Assessee. 16.2. As regards the first contention of the Revenue, the same does not require much examination by this Court inasmuch as at the first instance; the Assessing Officer had held that the Assessee's employees would not come within the purview of workman under Section 2(s) of the I.D. Act and disallowed the claim, on an appeal filed by the Assessee, the Commissioner, Income-tax (Appeals) CIT(A) accepted the Assessee's contention and held that the Assessee's employee would come within the purview of Section 2(s) of the ID Act. This aspect was not challenged oy the Revenue, although the Revenue had filed an appeal against the order of the CIT(A). Having accepted the said finding of the CIT(A) and not having filed any appeal, the Revenue cannot now seek to challenge the said finding in the present appeal. 1....
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.... 16.5. The Apex Court has in the case of Devinder Singh's (supra) categorically held that when a person is employed in an industry for hire or reward for doing manual, unskilled, skilled, operational, technical or clerical work, such a person would satisfy the requirement and would fail within the definition of the 'workman'. In the present case, a software engineer is a skilled person, a technical person who is engaged by the employer for hire or reward. Therefore, all the said persons would satisfy the requirement of being a workman in terms of Section 2(s) of the I.D. Act. 16.6. In our considered view, the concept of the workman has undergone a drastic change and is no longer restricted to a blue collared person but even extends to white-collared person. A couple of decades ago, an industry would have meant only a factory, but today industry includes software and hardware industry, popularly known as the Information technology industry. Thus the undertaking of the Assessee being an industrial undertaking, the persons employed by the Assessee on this count also would satisfy the requirement of a workman under Section 2(s) of the ID Act. 16.7. Sri.....
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....ate against the purpose and intent of Section 8OJJ-AA, which is the encourage creation of new employment opportunities. 16.11. The Income-tax Appellate Tribunal, while considering a similar situation as in Bosch Limited (supra) held that so long as the workman employed for 300 days, even if the said period is split into two blocks, i.e. the assessment year or financial year, the Assessee would be entitled to the benefit of Section 80JJ-AA in the next assessment year and so on so forthwith for a period of three years. The Income-tax Appellate Tribunal, having held to that effect, in our considered opinion, it would not be open for the Revenue to now contend otherwise, more so since the said order has attained finality on account of the Revenue not having filed an appeal. 16.12. It is sought to be contended by Sri. K V Aravind, learned Senior Panel counsel that the fact that such an interpretation could not be given is established by the curative amendment carried out in the year 2018 wherein it is clarified that an assesses whose employee completes 300 days in a second year would also be entitled to a deduction for three years therefrom. Thus he submits that the am....
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....icular assessment year but in the subsequent year so long as there is continuity of employment, the Assessee could continue to claim further benefit in the next two years as provided in under Section 80JJ-AA of the Act. 16.16. Accordingly, we answer Question No.1 by holding that a software engineer in a software industry is a workman within the meaning of Section 2(s) of the Industrial Disputes Act so long as the Software Engineer does not discharge any supervisory role. 16.17. The period of 300 days as mentioned under Section 80JJAA of the Act could be taken into consideration both in the previous year and the succeeding year for the purpose or availing benefit under Section 80JJAA. It is not required that the workman works for entire 300 days in the previous year. 16.18. Hence, in the facts and circumstances of the case, the software engineer being workman having satisfied the period of 300 days, the assessee is entitled to claim deduction under Section 80JJAA." 10. Being so, the allowability of deduction u/s. 80JJA has already been decided in favour of assessee in the case of Texas Instruments (India) (P.) Ltd. by the aforesaid judgment of Hon'ble H....