TMI Blog2020 (2) TMI 617X X X X Extracts X X X X X X X X Extracts X X X X ..... Dated:- 12-2-2020 - Smt. P. Madhavi Devi, Judicial Member For the Assessee : Sh. K.A. Sai Prasad, A.R. For the Revenue : Sh. Sandeep Kumar Mehta, D.R. ORDER This is assessee s appeal for A.Y. 2014-15 against the order of the Ld.CIT(A)-7, Hyderabad dated 14.11.2018. 2. Brief facts of the case are that the assessee is a Labour Contract Cooperative Society and has been filing the returns of income in the status of AOP. It filed its return of income for the A.Y. 2014-15 on 25.9.2014 admitting total income of Rs. nil after claiming deduction u/s 80P of the I.T.Act, 1961 (the Act) of ₹ 14,47,605/-. Subsequently, the case was selected for scrutiny under CASS and during the assessment proceedings u/s 143(3) of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en claiming the deduction u/s 80P(2)(vi) of the Act. Ld.Counsel for the assessee further submitted that the assessee is carrying on only labour contracts and if there is any income from any item other than the labour as noticed by the CIT(A), it is only incidental to the work carried on by assessee. Therefore, according to him, contracts carried on by the assessee are only labour contracts and not works contracts as held by AO and the CIT(A). He also placed reliance upon the decision of the Coordinate Bench of this Tribunal in the case of M/s Sai Krishna WLCCS in ITA No.234/Hyd/2016 for AY 2009-10 order dated 31.03.2017, wherein under similar circumstances it was held that the assessee was eligible for claiming deduction u/s 80P(2)(vi) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s. 80P(2)(a)(vi). In the assessment u/s. 143(3), Assessing Officer (AO) disallowed the deduction on the ground that assessee was a civil contractor for GHMC and is not a labour contractor. Further, he estimated the profit at 8% of gross contract receipts and determined the total income at ₹ 14,28,370/-. 3. Before the Ld.CIT(A), assessee submitted that it is being filing returns in the status of society and deduction u/s. 80P has been allowed in earlier years on similar facts. Assessee also submitted that only labourers are members and the profits are shared by the members as dividend and the material and machinery hire charges are incidental to the contract work, wherein assessee s members put in their efforts in executing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charges. For this the AR stated that since the society is meant for member and their relatives and kinsman, all the payments are made to them only. He further stated that the society is under continuous statutory audit. When pressed further, the AR stated that he has no objection for disallowances (out of ambit of 80P) and stated that they will not contest in appeals. In any case from the perusal of P L a/c, the quantum of expenses debited to P L a/c with reference to material ₹ 50,72,269 machinery hire charges, ₹ 8.8 lakhs, material charges ₹ 5.25 lakhs, VAT ₹ 6.14 lakhs etc. It is evident that the entire profit does not pertinent to labour supply alone. Substantial part is relatable to contract works ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. So far as the merits of the case is considered, even though no specific question is raised in the appeals filed, Senior Standing Counsel for the appellant submitted that this is an omission and department wants to amend the appeal to cover such a question also. We do not think any written amendment is required for this court to permit the counsel to raise a question of law, if it is substantial question of law warranting decision by this court under Section 260A of the Income Tax Act. We, therefore, permitted the counsel to raise this question orally and argue on merits. However, after going through the Tribunal's order and after considering the constitution and nature of activities of the respondent-Society, we feel the Societ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... table to labour inputs. We, therefore, hold that the Tribunal rightly granted deduction on the entire income of the Society under Section 80P(2)(vi) of the Act. Consequently the appeals are dismissed . 6.1. Since in this case also even though assessee is not involved in trading but is engaged in contract works, which included material being supplied by the Government, I am of the view that assessee is eligible for claim u/s. 80P(2)(a)(vi). No other contrary judgment has been brought to my notice. Respectfully following the principles laid down in the above judgment, I direct the AO to allow the deduction u/s. 80P(2)(a)(vi), as being allowed in earlier years also. Grounds are allowed. 5. Since facts and circumstances in the instant ..... X X X X Extracts X X X X X X X X Extracts X X X X
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