THOMAS CHACKO,KOCHI vs. THE DCIT KOCHI CIRCLE 1(1), KOCHI

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 & 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.”