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TMI Blog2016 (5) TMI 800X X X X Extracts X X X X X X X X Extracts X X X X ..... below on appreciation of material on record that the profit earned by the assessee cannot be regarded as profit derived by the labour cooperative society from the activity of collective disposal of labour of its members, the assessee had rightly been held not entitled to claim deduction under Section 80P(2)(a)(vi) of the Act. - Decided against assessee - ITA No. 473 of 2015 (O&M) - - - Dated:- 25-4-2016 - MR. AJAY KUMAR MITTAL AND MR. DARSHAN SINGH, JJ. For The Appellant : Ms. Rinku Dahiya, Advocate AJAY KUMAR MITTAL, J. 1. Delay of 18 days in refiling the appeal is condoned. 2. The present appeal has been filed by the assessee under Section 260A of the Income Tax Act, 1961 (in short the Act ) against the order dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account. Besides this, the Assessing Officer also made disallowances amounting to ₹ 75,000/- relating to consumable stores and ₹ 5,000/- on account of labour and welfare. Further, 1/6th of the travelling and conveyance expenses were also disallowed by the Assessing Officer. Feeling aggrieved, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [for brevity the CIT(A) ]. The CIT(A) vide order dated 12.11.2014 (Annexure A-4) upheld the order of the Assessing Officer and dismissed the appeal. The assessee assailed the order, Annexure A-4, in appeal before the Tribunal. The Tribunal vide order dated 28.5.2015 (Annexure A-5) dismissed the appeal by upholding the orders of the CIT(A) and the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (f) XX XX XX XX 8. Sub-section (1) of Section 80P of the Act provides that where the gross total income, of an assessee being cooperative society, includes any income referred to in sub-section (2) thereof, deduction shall be allowed to the assessee in computing its income in accordance with and subject to the provisions of this Section. 9. The eligibility to earn deduction under clause (vi) of subsection (2) of Section 80P of the Act, is where the entire amount of profits and gains of the cooperative society is attributable to 'the collective disposal of the labour of its members'. There is no ambiguity in the words used as they are very clear to mean that the earning of society must have been through utilization of the act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n which the members are specialized. An example would illustrate this. If there is a co-operative society of unemployed mathematics graduates who form a society, write out text books of mathematics and earning is made out of the text books, the earning may be said to be attributable to dispensation of labour of the members directly. Similarly, if the members belong to any other discipline, the work executed in actual application of the discipline would be disposal of labour of the members. On the other hand, if the members are manual labourers as a labour contract service cooperative society, and the work undertaken is executed by the manual labour of the members, the whole of its income would be exempted. A power of disposal always pre-sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income has been earned from labour employed by the society or out of the benefit of any capital available with the society it would not come under clause (vi) though it may fall under any other clause so that in the present case, the income actually derived from the labour of the members of the assessee would be exempt but not any income derived as a result of investment of capital or execution of any jobs by employed labour. 10. Applying the aforesaid legal principles to the facts in hand, herein the main object of the appellant-society is to promote the economic interest of manual labourers, skilled workers for the purpose of obtaining and execution of contracts of public or private work. The assessee claimed deduction under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nila Giri Engineering Cooperative Society Ltd's case (supra). 12. Adverting to the judgment of the Apex Court in Kerala State Co-operative Marketing Federation Ltd. and of this Court in Punjab State Cooperative Bank Ltd Ltd's cases (supra) relied upon by the learned counsel for the assessee, suffice it to notice that the principle of law enunciated therein, is well recognized. However, the issue before the Apex Court was relating to clause (iii) of Section 80P(2) whereas this Court on facts had held the assessee entitled to benefit of Section 80P(2)(a)(vi) of the Act. Thus, no benefit can be derived by the appellant from any of the said authorities referred to above being distinguishable factually. 13. It being concurre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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