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June 2009

Appeal — Order set aside to the High Court as the relevant decision was not considered.

By Kishor Karia, Chartered Accountant
Atul Jasani, Advocate
Reading Time 1 mins

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 12. Appeal — Order set aside to the High Court as the relevant decision was not considered.

[CIT vs. Madras Engineering Construction Co-op. Society Ltd., (2008) 306 ITR 10 (SC)].

The Assessing Officer negatived the claim of deduction under Section 80P(2)(a)(i) of the Act on the ground that the income reflected by the assessee can neither be attributed to actual labour of the members nor can be treated as arising out of collective disposal of its labour. The Commissioner of Income Tax (Appeals) following the earlier orders, allowed the appeal. The Tribunal dismissed the Revenue’s appeals. Before the Supreme Court, the Revenue contended that the High Court had failed to notice that the profit earned by the Society in executing the work was retained by the members themselves. The Supreme Court, however, found that its decision in Madras Auto Rickshaw Drivers’ Co-op. Society vs. CIT, (2001) 249 ITR 330 (SC), which had prima facie relevance, was not noticed by the High Court. The Supreme Court therefore set aside the order of the High Court and remitted the matter to it for a fresh consideration in the light of the aforesaid decision.

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