INCOME TAX OFFICER, WARD 1 AND TPS, KANNUR vs. KANNUR BUILDING MATERIALS CO OPERATIVE SOCIETY LIMITED, PAPPINISSERY, KANNUR

ITA 600/COCH/2025Status: DisposedITAT Cochin29 October 2025AY 2013-14Bench: SHRI INTURI RAMA RAO (Accountant Member), SHRI ANIKESH BANERJEE (Judicial Member)1 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the deduction under Section 80P(2)(a)(vi) is only for the labour of members. Since a significant portion of the work was done by non-members, the condition for deduction was not met. However, the Tribunal restored the matter to the AO to ascertain the exact utilization of member and non-member labour for proportionate deduction. Regarding Section 40(a)(ia), the Tribunal upheld the CIT(A)'s deletion of additions, finding that the payments were direct to workers and not through any contract or sub-contract.

What were the facts?

The assessee, a cooperative society engaged in sand mining and selling, claimed deduction under Section 80P(2)(a)(vi) for collective disposal of labour. The Assessing Officer rejected this claim, stating only 11% of members were involved, and made additions under Section 40(a)(ia) for non-deduction of TDS. The CIT(A) deleted the Section 40(a)(ia) additions but upheld the denial of Section 80P(2)(a)(vi) deduction.

What were the issues?

Whether the assessee cooperative society is eligible for deduction under Section 80P(2)(a)(vi) for collective disposal of labour when a significant portion of work is done by non-members? Whether the disallowance under Section 40(a)(ia) for non-deduction of TDS is justified for payments made directly to individual workers without a contract?

Which sections of the Income-tax Act were involved?

Section 80P(2)(a)(vi),Section 40(a)(ia),Section 194C,Section 143(3),Section 139(1),Section 153,Section 156

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Income Tax Appellate Tribunal, COCHIN BENCH

Before: SHRI INTURI RAMA RAO, AM & SHRI ANIKESH BANERJEE, JM

For Appellant: Shri Amaljith P.J., CA
For Respondent: Smt. Leena Lal, Sr. D.R
Hearing: 27.10.2025Pronounced: 29.10.2025

Per: Anikesh Banerjee, JM

2.

The instant appeal of the revenue and cross appeal by the assessee were filed against the order of the Learned National Kannur Building Materials Co-op. Society Ltd Faceless Appeal Centre, Delhi [for brevity, ‘Ld.CIT(A)’] passed under section 250 of the Income-tax Act, 1961 (in short, the Act’) for Assessment Year 2013-14, date of order 03/07/2025. The impugned orde

The order continues below.

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