Case Name : ITO vs. Nileshwar range kallu chethu vyavasaya thozhilali sahakarana sangham
Citation :  43 TAXMANN.COM 113 (COCHIN – TRIB.)
Court : ITAT-Cochin
Section : 80P
Meaning : The word ‘labour’ has not been defined in the act. The ahmedabad bench of the tribunal in the case of orient borewell co-operative society ltd. V. Ito  39 itd 557 has extracted the definition of the word, labour, as given in the webster’s new twentieth century dictionary unabridged second edition at page 1010 as follows: labour, n.L. Labour, labour, exertion, hardship pain 1. Physical or mental exertion; work; toil 2. A specific task; piece of work 3. All wage earning workers; distinguished from capital or management all manual workers whose work is characterized largely by physical exertion; distinguished from white-collar or professional workers. Having considered the abovesaid definition, the tribunal has observed that it is meant for those actual workmen/labourers, who form a co-operative society and derive income from collective disposal of labour of its members. The orissa high court in the case of nilagiri engg. Co-operative society ltd. V. Cit  80 taxman 562 has taken the view that the labour need not always be manual. However, in the instant case, the labour exerted by the members is manual only. The orissa high court in the case of nilagiri engg. Co-operative society ltd. (Supra) has observed that a power of disposal always presupposes the possession of something to be disposed of. Hence, if one carefully considers the words collective disposal of labour, what is required to be disposed of is the labour. Thus, the income should have been generated by a co-operative society by utilizing the labour of the members in a collective manner, if it wants to avail of deduction under section 80p(2)(a)(vi).