DCIT, Bangalore V. M/s. Texas Instruments India P. Ltd., Bangalore

ITA 1358/BANG/2010

• Counselvise Citation: 135821114 RSA 2010
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 22-12-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 02-12-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL BANGALORE BENCH A, BANGALORE BEFORE SHRI N.K.SAINI, ACCOUNTANT MEMBER AND SMT. P MADHAVI DEVI, JUDICIAL MEMBER I.T.A. NO.1358(BANG.)/2010 (ASSESSMENT YEAR : 2005-06) THE DEPUTY COMMISSIONER OF INCOME-TAX, LTU, JSS TOWERS, BSK III STAGE, BANGALORE APPELLA NT VS M/S TEXAS INSTRUMENTS (INDIA) PVT.LTD., 66/3, BAGMANE TECH PARK, BYRASANDRA, C.V.RAMAN NAGAR, BANGALORE-560 093. PAN NO.AAACT5445M RESPONDE NT REVENUE BY : SHRI ETWA MUNDA, CIT-III ASSESSEE BY : SHRI PADAMCHAND KHIN CHA, CA DATE OF HEARING : 22-09-2011 DATE OF PRONOUNCEMENT : 29-09-2011 O R D E R PER SMT P. MADHAVI DEVI, JM ; THIS APPEAL BY THE REVENUE RELATES TO ASSESSMENT YE AR 2005-06. THE REVENUE HAS RAISED THE FOLLOWING GROUN DS IN ITS APPEAL; ITA.NO.1358(B)/10 2 1. THE ORDER OF THE LD. CIT(A) IN SO FAR AS IT IS PREJUDICIAL TO THE REVENUE, IS OPPOSED TO LAW AND FACTS OF THE CASE. 2. THE LD. CIT(A)ERRED IN ALLOWING RELIEF UNDER SECTION 80JJAA OF THE IT ACT, 1961 HOLDING THAT THE ASSESSEE HAS SATISFIED ALL THE CONDITIONS FOR CLAIMING RELIEF U/S 80JJAA OF THE ACT. 3. THE LD. CIT(A) OUGHT TO HAVE CONSIDERED THE FACT THAT THE EMPLOYEES FOR WHICH THE ASSESSEE IS CLAIMING DEDUCTION U/S 80JJAA ARE SOFTWARE ENGINEERS AND DOES NOT FALL WITHIN THE CATEGORY OF WORKERS UNDER THE INDUSTRIAL DISPUTES ACT, 1947. THEY ARE NOT REGULAR WORKMEN AS STIPULATED U/S 80JJAA. 4. THE LD. CIT(A) OUGHT TO HAVE CONSIDERED THE FACT THAT THE WORKERS WHO WERE DRAWING SALARY LESS THAN RS.1600/- P.M ARE ONLY WORKERS AS PER THE INDUSTRIAL DISPUTES ACT, 1947. 5. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, IT IS HUMBLY PRAYED THAT THE ORDER OF THE CIT(A) BE SET ASIDE AND THAT OF THE AO BE RESTORED. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS IN THE BUSINESS OF DESIGN, MANUFACTURE AND EXPORT OF COMPU TER SOFTWARE. IN THE RETURN OF INCOME, THE ASSESSEE CLA IMED DEDUCTION U/S 80JJAA OF AN AMOUNT RS.11,17,72,181/- . THE ITA.NO.1358(B)/10 3 AO OBSERVED THAT THE DEDUCTION U/S 80JJAA IS AVAILA BLE IN RESPECT OF ADDITIONAL WAGES PAID TO THE NEW REGULAR WORKMEN EMPLOYED IN THE RELEVANT PREVIOUS YEAR, BUT THE ASS ESSEES EMPLOYEES ARE SOFTWARE ENGINEERS AND THEREFORE, CAN NOT BE SAID TO BE WORKING IN A ROUTINE OR SPECIFIC MANNER. HE ALSO HELD THAT THE EMPLOYEES DO NOT FIT THE DEFINITION OF WORKMEN UNDER THE INDUSTRIAL DISPUTES ACT, 1947 WHICH MEANING IS ALSO APPLICABLE U/S 80JJAA OF THE ACT. IT IS ALSO OBSERVED BY THE AO THAT IN THE EARLIER YEARS, SIMILAR DISALLOWANCE WAS MADE AND T HE TRIBUNAL VIDE ITS ORDER DATED 21-12-2006 IN ITA NOS.273 & 27 4(B)/2005 HAS DECIDED THE ISSUE IN ASSESSEES FAVOUR. BUT THE AO OBSERVED THAT THIS DECISION IS NOT ACCEPTABLE FOR THE REASON S MENTIONED IN PARA-5 OF ITS ORDER I.E ON MERITS AND ALSO BECAU SE THE SAID DECISION IS APPEALED AGAINST IN THE HONBLE HIGH CO URT OF KARNATAKA. ACCORDINGLY, HE DISALLOWED THE DEDUCTIO N. 2.1 ON APPEAL, THE CIT(A) FOLLOWED THE DECISION OF THE TRIBUNAL IN THE ASSESSEES OWN CASE AND HAD SET ASI DE THE MATTER TO THE AO WITH RESPECT TO THE DEDUCTION TO THE EXTENT THE ASSESSEE HAS CLAIMED FOR EMPLOYEES WHO HAVE BEE N WORKING FOR LESS THAN 300 DAYS IN THE PREVIOUS YEAR IN ACCO RDANCE WITH CLAUSE (II)(C) OF THE EXPLANATION TO SEC.80JJAA, A FTER PROVIDING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. ITA.NO.1358(B)/10 4 2.2 AGGRIEVED BY HIS DIRECTIONS, THE REVENUE IS IN APPEAL BEFORE US. AT THE TIME OF HEARING, LEARNED COUNSEL FOR THE ASS ESSEE FILED BEFORE US THE COPIES OF THE ORDERS THE TRIBUN AL IN THE ASSESSEES OWN CASE FOR THE EARLIER ASSESSMENT YEAR S. WE FIND THAT THE ISSUE HAS BEEN CONSIDERED BY THE CIT(A), A ND ACCORDINGLY HAS ISSUED SUITABLE DIRECTION TO THE AO . MERELY BECAUSE AN APPEAL HAS BEEN FILED IN THE HIGH COURT THE ORDER OF THE TRIBUNAL DOES NOT LOSE ITS PRECEDENTIAL VALUE. THE CIT(A) HAS RIGHTLY FOLLOWED THE SAME. IN VIEW OF THE SAME , WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDERS OF THE CIT(A). 3. IN THE RESULT, THE REVENUES APPEAL IS DISMISSE D. ORDER PRONOUNCED IN THE OPEN COURT ON THE 29 TH SEPTEMBER, 2011. SD/- SD/- ( N.K.SAINI) (SMT. P. MADHAVI DEVI) ACCOUNTANT MEMBER JUDICIA L MEMBER PLACE: BANGALORE DATED: 29-09-2011 AM* COPY TO : 1. THE ASSESSEE 2. THE REVENUE 3. CIT(A) 4. CIT 5. DR 6. GF(BLORE) BY ORDER ITA.NO.1358(B)/10 5 AR, ITAT, BANGALORE