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Income Tax Appellate Tribunal, COCHIN BENCH, COCHIN
Before: Shri Satbeer Singh Godara & Shri Amarjit Singh
O R D E R Per Bench These assessee’s three appeals arise against orders of the National Faceless Appeal Centre , Delhi [CIT(A)] in proceedings u/s. 250 of the Income Tax Act, 1961 (the Act) as under : - DIN & Order No. Date No. 1 751/Coch/2023 2019-20 ITBA/NFAC/S/250/2023- 29.08.2023 24/1055556432(1) 2 325/Coch/2022 2020-21 ITBA/NFAC/S/250/2023- 07.03.2023 24/1050489048(1) 3 326/Coch/2023 2021-22 ITBA/NFAC/S/250/2023- 10.03.2023 24/1050612837(1) Heard both parties. Case files perused.
Thomas Chacko 2. Learned counsel submits at the outset that the assessee’s latter twin appeals ITA No. 325 & 326/Coch/2023 raise identical substantial grounds claiming section 80JJAA deduction(s) involving varying sums disallowed by the Assessing Officer, as upheld in the lower appellate discussion, as under: - “4.3 In the present case, it is an undisputed fact that the appellant furnished his return of income on 30.12.2020 against the extended due date of 15.02.2021 with gross total income at Rs. 2,31,31,119/- and claimed deduction of Rs. 12,24,654/- (1,50,000 u/s 80C and 10,74,654/- u/s 80JJAA) in the return. It is also an undisputed fact that the appellant has declare business income of Rs. 7,35,054/- only but claimed the deduction of Rs. 10,74,654/- u/s 80JJAA of the Act. Therefore, the AO/CPC has restricted the deduction to the extent of income declared under the head "income from business or profession". 4.4 This issue has been examined and it is seen that section 80JJAA of the Act is based on the income derived from business whereas the appellant has claimed the deduction u/s 80JJAA over and above the business income by taking a plea that it doesn't exceeds the gross total income as prescribed in section 80A(2) of the Act. It is pertinent to note that the deduction u/s 80JJAA is allowed for additional expenditure on new employment in the business concern and not from non-business income. In fact, the appellant has mis- understood the provision of section 80A(2) that deduction u/s 80JJAA is allowable against all source of income upto GTI. Section 80JJAA of the Income Tax Act, 1961 is a tax incentive for employment generation and provides for deduction from income from business of an assessee for the employment of new employees by the assessee. This deduction is provided in order to promote employment generation in the country. Thus, the deduction has to be restricted to the business income under overall restriction imposed in section 80A(2) of the Act. Since the business income is only Rs. 7,35,054/- included in GTI of Rs. 2,31,31,119/-, the deduction u/s 80JJAA has to be restricted to Rs. 7,35,054/-, Hence, I don't find any infirmity in the restriction of deduction u/s 80JJAA of the Act made by the AO in intimation order. Thus, all the grounds relating to the sole issue is rejected.”
It is in this factual backdrop that the assessee claims itself as entitled for the impugned deduction going by the “gross total” income whereas the Revenue’s stand is that the same could not exceed the actual business income. Learned CIT(A) has admittedly involved sec.80A(2) of the Act to conclude that the assessee’s impugned sec.80JJA deduction could not exceed to it’s actual business income of Rs.7,35,054/-. The Revenue could hardly dispute the clinching expression used in the Act in sec.80A(2) reads “The aggregate amount of the deduction under this Chapter shall not in any case, exceed the gross total income of the assessee.” Meaning thereby, that Thomas Chacko there is no such stipulation of restricting the deduction claim to the extent of business income, as held in the lower appellate discussion hereinabove (supra). We accordingly direct the “CPC” herein to re-compute the assessee’s sec.80JJA deduction claim(s) strictly in tune with sec.80A(2) of the Act to the extent of it’s gross total income(s) in al these three assessment years. Ordered accordingly.
The assessee’s twin appeals ITA.Nos.325 & 326/Coch./2023 raising this sole substantive ground and it’s former appeal ITA.No.751/Coch./2023, succeed for statistical purposes in very terms.
The assessee’s latter substantive grievance in pleads that both the learned lower authorities action making section 40(a)(ia) disallowance of Rs. 20,04,505 on account of non-deduction of TDS on its part, is not sustainable in law. Learned counsel submits that he had filed all the relevant documents [including Chartered Accountant’s prescribed certificate] to the effect that the recipients herein stand duly assessed for the corresponding income in their respective hands. We deem it appropriate in these peculiar facts that the larger interest of justice would be met in case the instant issue of the assessee compliance to sec.40(a)(of the Income Tax Act, 1961 (in short "the Act").) 2nd proviso, is restored back to the Assessing Officer for his necessary factual verification in very terms. This assessee’s appeal ITA 751/Coch/2023 is allowed for statistical purposes. Ordered accordingly.
These assessee’s three appeals ITA.Nos.751, 325 & 326/Coch./2023 are allowed for statistical purposes in above terms. A copy of this common order be placed in the respective case files.