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| The Tax Publishers2020 TaxPub(DT) 2145 (Bang-Trib) : (2020) 183 ITD 0007 : (2020) 207 TTJ 0586 INCOME TAX ACT, 1961
Section 80JJA
If deduction under section 80JJA was refused in the first year of employment of new employee then it could not be said that for next two succeeding assessment years also, benefit of deduction would not be available because such an approach would defeat the very purpose for which deduction under section 80JJAA is allowed for three consecutive assessment years.
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Deduction under section 80JJA - Allowability - Deduction not allowed in first year of employment -
Assessee claimed deduction under section 80JJAA. AO denied deduction on the ground that employees did not work for more than 300 days in financial year 2006-07 relevant to assessment year 2007-08, i.e., the first year of employment. Held: It was not proper to say that if deduction under section 80JJA was refused in the first year of employment of new employee then for the next two succeeding assessment years also, benefit of deduction would not be available. Such an approach would defeat the very purpose for which deduction under section 80JJAA is allowed for three consecutive assessment years. This aspect has been clarified in Finance Act, 2018 by adding a second proviso to the definition of additional employee in Explanation (ii) to section 80JJAA. Even prior to such curative or clarificatory amendment, the claim for deduction under section 80JJAA could not be and ought not to have been disallowed on this ground.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2008-09
INCOME TAX ACT, 1961
Section 32(1)(iia)
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