9911796707
TMI Blog1997 (4) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... ? " This reference pertains to the assessment year 1980-81. The assessee is a co-operative society registered. under the Maharashtra Co-operative Societies Act and carries on trading activities with its members as well as non-members. In its assessment for the assessment year 1980-81, the assessee claimed exemption in respect of the profits arising out of the trading activities carried on by it on the principle of mutuality. The Income-tax Officer allowed the exemption. However, the Commissioner of Income-tax revised the order of the Income-tax Officer in exercise of powers of suo motu revision under section 263 of the Income-tax Act, 1961 ("the Act"), as he was of the opinion that the society did not satisfy the principle of mutuality. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pur Zilla Krishi Audyogik Sahakari Sangh Ltd. [1994] 209 ITR 481. Section 80P, at the material time, so far as relevant, read as follows : " 80P. Deduction in respect of income of co-operative societies.--(1) Where, in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub-section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub-section (2), in computing the total income of the assessee. (2) The sums referred to in sub,-section (1) shall be the following, namely :-- (a) in the case of a co-operative society engaged in-- (i) carrying on the business of banking or providing credit facilities to its mem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g milk, oilseeds, fruits or vegetables, as the case may be ; or (ii) the Government or a local authority ; or (iii) a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956), or a corporation established by or under a Central, State or Provincial Act (being a company or corporation engaged in supplying milk, oilseeds, fruits or vegetables, as the case may be, to the public), the whole of the amount of profits and gains of such business (c) in the case of a co-operative society engaged in activities other than those specified in clause (a) or clause (b) (either independently of, or in addition to, all or any of the activities so specified), so much of its profits and gains attributable to such activities as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... items was not the deciding factor. It was held that the correct approach would be to grant exemption to the whole amount of profits and gains attributable only to actual sales of specified commodities to members, irrespective of the original intention at the time of purchase. It is clear from the above decision that a co-operative society is entitled to exemption in respect of its income from activities falling under section 80P of the Act with its members to the extent indicated in the said section. In the instant case, it is not clear from the statement of the case or from the orders of the authorities below including the Tribunal as to what were the trading activities undertaken by the assessee. We, however, find from the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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