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2009 (10) TMI 890 - HC - Income TaxDeduction/exemption u/s 80P(2)(vi) - claim for the year 2003-2004 is not maintainable for the reason of non-filing of revised return - As per assessee purpose of constitution and functioning of the Society is "collective disposal of labour of it's members" qualifying for deduction - AO allowed the assessee to raise the claim of deduction/exemption, but rejected the claim on the ground that assessee is engaged in civil construction work and also in purchase and sale of sand and other construction materials - HELD THAT:- Once the claim is entertained and decided by the AO on merits, we do not think the department is entitled to canvass the position that the claim cannot be entertained for want of a revised return. This is because if the Assessing Officer had raised objection against raising the claim through a letter, assessee would have been able to file a revised return a that stage and maintain the claim within the norms covered by the decision of the Supreme Court [2006 (3) TMI 75 - SUPREME COURT]. We, therefore, uphold the finding of the Tribunal that the technical objection raised by the department is not tenable. Deduction on the entire income - We feel the Society is entitled to deduction u/s 80P(2)(vi) on the entire income because in the first place, all the members of the Society are workers and they engage themselves in the execution of civil works undertaken by them. There is no case for the department that Society consists of any member other than construction worker and there is also no case that all the member- workers are not engaged in the activities of the Society which is execution of civil construction work. If members of the Society are engaged in construction activities, then the Society itself should be held to be engaged in collective disposal of labour of it's members. Therefore, the income earned from construction work qualifies for deduction u/s 80P(2)(vi). The trading done in construction materials like sand which are stated to have been purchased and sold by the Society. Here again, the transactions are incidental in nature and the members themselves are engaged in handling of the goods in the course of purchase and sale of the same. Construction material involved is also sand where the labour involved is substantial and the income earned is also not found to be attributable to profit in trading and not attributable to labour inputs. We, therefore, hold that the Tribunal rightly granted deduction on the entire income of the Society u/s 80P(2)(vi). Consequently the appeals are dismissed.
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