The query relevant in the context of sec. 40(a)(ia).
Hyd. Bench of ITAT held that payment of direct expenses like labour charges are not covered by sec. 30 to 38 but falls under sec. 28(i), which deals with chargeability of income under the head "Business". Sec. 40 starts with the nonobstant clause "Notwithstanding anything to the contrary in ss. 30 to 38". Therefore, mischief of sec. 40(a)(ia) does not apply to claim of direct expenses like labour charges. This was held in the case of K. Srinivas Naidu V. ACIT 131 TTJ 17(Hyd. Bench)