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TMI Blog1986 (5) TMI 90X X X X Extracts X X X X X X X X Extracts X X X X ..... mber of apex societies formed at the instance of the State Government for co-ordinating village labour utilization. 2. The assessee apex society has as its members, primary member societies, which are themselves engaged in disposal for the labour of its members. Each primary member society nominates one representative to the assessee-society. Under clause G1.1 the supreme authority for the assessee federation vests in the general body meeting in terms of section 72 of the Maharashtra Co-operative Societies Act. But the power delegated by the general body to the managing committee under the bye-laws cannot be interfered with by the general body. 3. The assessee filed its return showing gross total income of Rs. 1,50,101. Net income came ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... According to the Commissioner (Appeals), exercise of voting rights by a representative of the primary society is not same thing as is required under section 80P(2)(a)(vi) proviso. The Commissioner (Appeals) further relied on CIT v. U.P. Co-operative Marketing Federation Ltd. [1980] 122 ITR 913 (All.). The Commissioner (Appeals) was aware of the contrary view in CIT v. Tamil Nadu Co-operative Marketing Federation Ltd. [1983] 144 ITR 74 (Mad.) but found no reason to grant relief in view of the proviso above. The commissioner (Appeals) also rejected the claim regarding mutuality. 6. Shri Inamdar read out the relevant parts of the law. Section 80P (1) gives deduction of certain sums. These sums are as below : "(2) The sums referred to in su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erefore, cannot be applied to section 80P (2) (a) (vi). 7. Shri Inamdar next contended that even the proviso does not take the assessee out of exemption clause. The proviso speaks of restricting the voting rights to individuals who contribute their labour. As there are no such individuals who are members, the question of restricting the voting rights to such contributories does not arise. The proviso applies only when individuals are members. Besides, in substance since such individuals in effect nominate a person to act as a representative of the primary societies, the real voting rights are restricted in the manner contemplated by the proviso. There are no person other than nominees of primary societies entitled to voting rights. The au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... warranted by the nature of the provision of law. Ground No. 5 (regarding mutuality) was not pressed. 10. We have examined the facts. In our opinion the assessee is entitled to exemption under section 80P (2) (a) (vi) read with proviso. The assessee is engaged in providing the collective labour of its members. For this purpose the member need not be the person providing the individual labour but need be one who provides collective labour. The assessee gets 1 per cent of contract as its commission for the services of co-ordinating the various activities. Nominations to Zilla Parishad, Collector, etc., are part of the job for which the assessee gets the income. Such income is from business. The assessee is thus engaged in providing collecti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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