9911796707
TMI Blog2015 (8) TMI 1200X X X X Extracts X X X X X X X X Extracts X X X X ..... as only during the impugned assessment year and the following assessment year that the Revenue has raised dispute with respect to profits from consumer goods and garments division We are of the considered view that since the turnover from the consumer divisions as compared to the total turnover of the assessee is miniscule, it would not change the nature of activities of Co-operative Society. The assessee Co-operative Society is primarily engaged in providing credit facilities to its members and it is for the benefit for members that consumer division and cloth division have been included in the activities of the society. By providing such facilities to its members it cannot be said that the assessee is engaged in trading of consumer goo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee filed its return of income for the assessment year 2008-09 declaring Nil income. The case of the assessee was selected for scrutiny, accordingly, notice u/s. 143(2) was issued to the assessee on 21-08- 2009. The net income as per the profit and loss account filed by the assessee is ₹ 43,40,243/-. The assessee claimed the entire income as exempt u/s. 80P(2)(a)(i). During the course of scrutiny assessment, the Assessing Officer found that the assessee has earned income of ₹ 3,89,174/- from sale of consumer goods and readymade/cloth divisions. The details of same are as under: i) Cloth Business 16,315 ii) Readymade Business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over relates to nonmembers. Whenever the sales are made to non-members, a separate marking is made in the sale register. The sales summary are prepared on monthly basis to identify sales made to members and non-members. At the end of the year, average ratio of sales to members and nonmembers is worked out. In the year under appeal, the sales to nonmembers is only 20%. The assessee is governed by the principles of mutuality. The activities like Grahak Bhandar, Cloth Division, Grahapyogi Division, Medical Division etc. are very much part of the objects of the society for the benefit of its members. The majority of transactions i. E. more than 80% are with members alone. The assessee has been carrying on these activities for long and no object ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AR has placed reliance. It is an undisputed fact that the assessee is a Co-operative Society and is engaged in providing credit facilities to its members and substantial part of its earnings are from the activities related to sale of agriculture implements and machines, chemicals, pesticides, seeds etc. It has come on record that the assessee is having net income of ₹ 43,40,243/- out of which merely ₹ 3,89,174/- relates to income from sale of consumer goods, cloth/readymade business etc. It has not been disputed that 80% of the transactions by the assessee are with its members alone. The assessee has claimed deduction u/s. 80P(2)(a)(i). The relevant extract of the section under which the assessee has claimed deduction is as und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eans a society for the benefit of the consumers;] 7. It is an admitted position that these activities were carried out by the assessee for several years and no objection whatsoever was raised by the Department on this count. The assessee has been consistently following the same method of accounting and the nature of activities carried out in the past, as well as, in subsequent assessment years is same. It was only during the impugned assessment year and the following assessment year that the Revenue has raised dispute with respect to profits from consumer goods and garments division. The ld. AR of the assessee has drawn our attention to the assessment order passed in the assessment year 2010-11 u/s. 143(3) wherein no such dispute was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Court of India in the case of CIT Vs. Bankipur Club Ltd. (supra) has held as under: 14. Now we turn to the main question canvassed by the Revenue in the appeals coming under Groups A to D, namely, whether the assessee- mutual clubs-are entitled to exemption for the receipts or surplus arising from the sales of drinks, refreshments etc. or amounts received by way of rent for letting out the buildings or amounts received by way of admission fees, periodical subscriptions and receipts of similar nature, from its members? In all these cases, the Tribunal as also the High Court have found that the amounts received by the clubs were for supply of drinks, refreshments or other goods as also the letting out of building for rent or the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X
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