INCOME TAX ACT, 1961

Section 80P(2)(vi)

Deduction under section 80P(2)(vi) - Co-operative society - Deduction denied alleging assessee carried on works contracts -

Assessee-co-operative society claimed deduction under section 80P(2)(vi). AO denied the said deduction on the ground that the assessee was carrying on works contracts. Assessee contended that it was carrying on only labour contracts and if there was any income from any item other than the labour, it was only incidental to the work carried on by it. Revenue contended that as the assessee was not only dealing with labours but was dealing with other materials also, thus, it could be said that it was dealing in works contracts. Held: In view of decision of Coordinate Bench of Tribunal in case of M/s Sai Krishna WLCCS in ITA No.234/Hyd/2016 for assessment year 2009-10 order dated 31-3-2017, income earned from construction works qualifies for deduction under section 80P(2)(vi) and if there is a transaction, which is incidental to such contracts, then the same is also eligible for deduction under section 80P(2)(vi). In instant case, as expenditure incurred on material was incidental to the activity of collective disposal of labour force; accordingly, the assessee would be entitled to deduction under section 80P(2)(vi).

Followed:M/s Sai Krishna WLCCS in ITA No.234/Hyd/2016 for assessment year 2009-10 order dated 31-3-2017

REFERRED : CIT v. Uralungal Labour Contract ITA no.1722 of 2009, dated 29-10-2009

FAVOUR : In assessee's favour

A.Y. : 2014-15

INCOME TAX ACT, 1961

Section 80P(2)(a)(vi)

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