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Issues involved: Interpretation of exemption u/s 80P(2)(a)(i) of the Income-tax Act, 1961 for income from printing press and service charges for the supply of pumping sets.
For the income derived from the printing press, the court held that it was not exempt from tax under section 80P(2)(a)(i) of the Act, based on a previous decision regarding a similar provision (s. 81(i)(a)) which was deleted and replaced by the current section. The court emphasized that income exempted should arise from the business of providing credit facilities, not merely selling goods on credit. Regarding the income from service charges for the supply of pumping sets, the Tribunal found that the assessee-society provided credit facilities to the cane-growers, who were members of a member-society of the assessee. The Tribunal concluded that the service charges were exempt under s. 80P(2)(a)(i) as the society had derived income from providing credit facilities to its members. However, the court disagreed with the Tribunal's interpretation, stating that the cane-growers were not members of the assessee-society as per the Co-operative Societies Act. The court highlighted the specific definition of "member" under the Act and concluded that the conditions of s. 80P(2)(a)(i) were not met, thus the income from service charges was not exempt from tax under the said section. In conclusion, the court ruled against the assessee, holding that both the income from the printing press and service charges for pumping sets were not exempt under section 80P(2)(a)(i) of the Income-tax Act, 1961. The Commissioner was awarded costs amounting to Rs. 200.
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