TaxTMI 
TaxTMI 
2022 (3) TMI 244
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssessment year 2012-13, the assessee filed its return of income on 22.12.2012 declaring a total income of Rs. 77,13,73,910/- after claiming a deduction of Rs. 94 under Section 80JJAA of the Act. As per the return of income, the tax payable under Section 115JB of the Act was Rs. 15,58,95,950/- as against the tax payable of Rs. 25,02,72,265/- under the normal provisions of the Act. Since the tax payable under the normal provisions of the Act was higher than the tax payable under Section 115JB of the Act, the assessee paid taxes under the normal provisions of the Act. 4. The return was selected for scrutiny and during the course of assessment, the assessee made a revised claim of deduction under Section 80JJAA amounting to Rs. 7,99,50,456/- before the Assessing Officer, stating that in the return of income filed, inadvertently the claim of deduction under section 80JJAA was made for Rs. 94/- as against Rs. 7,99,50,456/-. An order dated 27.11.2014 was passed under section 143(3) of the Act wherein, the AO denied the original as well as the revised claim for deduction under Section 80JJAA of the Act. The Assessing Officer further computed the tax liability under Section 115JB by addi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sider each of the points contended here in the following paragraphs. 12. The Ld. AR submitted that a lawfully permissible deduction cannot be denied basis that the same was not claimed through a revised return u/s. 139(1) of the Act. The Ld. AR also submitted that in fact, in the present case, the assessee did make a claim in the original return but for a wrong amount which was rectified during the course of the asst. proceedings. The Ld. AR further submitted that there are many judicial pronouncements including those rendered by the coordinate bench of Bangalore Tribunal. The Ld. AR brought to our notice the decision of WIPRO Ltd., Vs. DCIT (2015) 62 taxmann.com 26 (Kar) and the CBDT Circular No. 14(XL-35) dated 11/4/1955. 13. The Ld. DR relied on the order of IT authorities. 14. With regard to the question whether the assessee can claim for a lawful deduction which was not claimed in the return of income filed u/s. 139(1) during the course of assessment, this issue is well settled now and there are plethora of judgments discussing this issue where it has been held that the assessee cannot be denied the deduction. The courts have clearly brought out the distinction betwee....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rn of his income or the income of such other person during the previous year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed. If in such return the assessee discovers any omission or any wrong statements therein which has to be necessarily with reference to his income and if it is sought to be corrected, then it could be done only by resorting to a revised return under Section 139(5) of the Act. The income contemplated by Section 139(1) of the Act can only be the income which the assessee bona fide believes to be his income and not the income as finally assessed by the assessing officer. On the discovery of omission or wrong statement in the earlier return filed by the assessee he can safely file a revised return without recourse to the assessing officer in any way. Once such a revised return is filed under Section 139 (5), the effective return for the purpose of the assessment is thus the return which is ultimately filed by the assessee on the basis of which he wants his income to be assessed. In this context one should notice the issue on hand is not with regard to a claim that would vary the income of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....led under Section 139(1) and on the ground that no revised return is filed under Section 139(5) of the Act. What the assessee is claiming by way of a letter is to bring to notice of the assessing authority the statutory provisions as well as the provisions of the Double Taxation Avoidance Agreement under which the assessee is entitled to claim tax benefit, as the said benefit of tax was not claimed in the return filed under Section 139(1) of the Act. Once the assessee files the necessary particulars and claims relief under the provisions of the Double Taxation Avoidance Agreement, the limitation placed by domestic law would yield to the tax relief provided for under the Double Taxation Avoidance Agreement. Therefore, the assessing authority was not justified in rejecting the said claim on the ground that no revised return is filed under Section 139(5) of the Act. In fact, probably the assessing authority was conscious that it is not a valid ground to reject the claim, he proceeded to consider the claim of the assessee on merits and has rejected the claim on merits also. 74. In view of the aforesaid discussions, the said substantial question of law is answered in favour of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ions are directory and the requirement of the report of the accountant to be filed with the return of the income would stand satisfied if it is submitted before the assessment order is passed. 20. The aforesaid decisions leave no manner of doubt that the requirement of sub-section (7) of Section 80IA of the Act, which is made applicable to section 80IB of the Act in view of the provisions of sub-section (13) of Section 80IB of the Act, that the audit report should be furnished along with the return of income is a directory requirement and would stand satisfied if the audit report is furnished during the course of the assessment proceedings." Similar view is taken by the jurisdictional High Court in the case of CIT vs ACE Multtaxes Systems (P) Ltd. (2009) 317 ITR 207 (Karnataka). We place reliance on the judicial pronouncements and hold that the assessee should be allowed the deduction u/s. 80JJAA since the Form 10DA was filed during the course of the assessment. 18. The Ld. DR during the course of the hearing brought to our attention that the amount mentioned in Form 10DA for the asst. year 2012-13 does not match with the amount actually claimed by the assessee for t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd 2006-07 and further that the plant and machinery purchased by the assessee from FFIPL in the financial year 2007-08 also did not exceed 20% of the total plant and machinery of the assessee during the said financial year. He further observed that since there was no purchase of old plant and machinery from FFIPL in the earlier assessment year even as per contemporaneous records of the EOU/Customs authorities. The relevant date of the plant and machinery purchased by the assessee over the years is reproduced at para 1.2.3, page 30 of the order of the CIT(A). Thus, CIT(A) held that the manufacturing activity carried on by the assessee In the assessment years earlier to assessment year 2008-09 was by use of new plant and machinery. As regards the transfer of business premises, employees and the customers of FFIPL to the assessee, the CIT(A) observed that there was no prohibition in the use of the business premises of FFIPL by the assessee and also of the employees and customers of FFIPL and further that the transfer of employees and customers of the assessee was only a small percentage of the total employees and customers of the assessee respectively. Thus holding, the CIT(A) set asi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....A No. 1210/Bang/2018) has considered the similar issue and held that "10. We may like to clarify that in a case if the assessee fulfils both the conditions that workmen employed during the year were 100 and percentage increase of regular workmen as compared to last day of preceding year is not less than 10 per cent, the assessee will be eligible for the benefit in excess of 100 workmen employed. In other words the law does not require that in the year the number of regular workmen appointed should be more than 100 and only excess of 100 regular workmen so employed will be eligible for benefit of section 80JJAA of the Act. The ld. CIT(A) as well as Assessing Officer have gone wrong in excluding 100 regular workmen out of 236 workmen employed during previous year relevant to assessment year 2003-04. The Assessing Officer will bear in mind this position of law while computing additional wages for the purposes of deduction under section 80JJAA of the Act" 26. We respectfully follow the decision of the coordinate bench of the Bangalore Tribunal and hold that the 100 employees need not be excluded for the purpose of computing the deduction u/s. 80JJAA where the employees are ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to be employed for a period of 300 days continuously. There is no such criteria made out for a person to be employed in any particular year or otherwise. If such a restrictive interpretation is given, then any person employed post 5th June of a particular year would not entitle the Assessee to claim any deduction. Thus in order to claim the benefit under section 80JJ-AA, an employer would have to hire the workmen before 5th June of that year. As a corollary, since the Assessee would not get any benefit if the workmen were engaged post 5th June, the employer/Assessee may not even employ anyone post 5th June, which would militate against the purpose and intent of section 80JJ-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 Ltd. (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 v in the next assessment year and so on so forthwith for a period of three years. The Income-tax Appellate Tribunal, having hel....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... even though the Revenue contends that there was no provision in the year 2007 permitting the Assessee to avail the benefit of deduction when the employee works for a period of 300 days in consecutive years. 16.15 In view thereof, the substantial question No. I is answered by holding that the software professional/engineer is a workman within the meaning of section 2(s) of ID Act, so long as such a software professional does not discharge supervisory functions, the benefit of section 80JJ-AA can be claimed by an employer/assessee even if the employee were not to complete 300 days in a particular 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." 29. Considering the binding provisions of the jurisdictional High Court's decision, we allow the appeal of the assessee and hold that the assessee is entitled for a claim u/s. 80JJAA. 30. The next ground for our consideration is the addition made to the book profit of the assessee u/s. 115JB of the Act. 31. The AO during the course of asst. proceedings has ad....
X X X X Extracts X X X X
X X X X Extracts X X X X
....thereof reads as thus: "(c) The amount or amounts set aside to provisions made for meeting liabilities, other than ascertained liabilities;" Therefore as per the provisions, if an amount is specified for provision which is for meeting with the liabilities not ascertained such provision so made shall have to be added back to the book profit of the company. In other words if such provision is made for ascertained liability, no such addition back shall be made. In assessee's case the provision for gratuity and leave encashment is done based on the actuarial valuation which fact is available on record from the Actuarial Report submitted (page 188 - 255 of the paper book). The law is fairly settled in this regard and the courts have taken a consistent view that when the provision for gratuity/leave encashment is done based on actuarial valuation the same cannot be held as an unascertained liability and cannot be added for the purpose of computing the book profits u/s. 115JB. The Hon'ble Jurisdictional High Curt in the case of CIT VS. Kirloskar Systems Ltd., (2013) 40 Taxmann.com 124 (Kar) held that "The Apex Court in the case of Bharat Earth Movers Vs. CIT [2000] 245 IT....