Thursday, December 15, 2011

CAN'T LINK BENEFITS OF I-T DEDUCTIONS TO DIRECT EMPLOYMENT: HC

The Bombay High Court (HC) has ruled that the Income- Tax Department cannot deny the benefits of deduction to the assessee companies on the ground that they must directly employ ten or more workers in their establishments. The court dismissed the plea of the revenue which said the benefits of deduction under the income-tax law cannot be extended to the assessee employing the stipulated number of the workers through the agency or contractors. A bench comprising Justice JP Devadhar and Justice AR Joshi said that the condition imposed under Section 80IB(2)(iv) of the Act (Income
Tax Act, 1961) is that the assessee must employ ten or more workers in the manufacturing process/production of articles or things and it is immaterial as to whether the workers were directly employed or employed by hiring workers from a contractor.

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