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TMI Blog1991 (6) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... e whole of the amount of profits and gains of business attributable to the marketing of the agricultural produce of its members were deductible from gross total income. The submission before the CIT(A) was that the agricultural produce, comprised of groundnuts of the members, were brought to the assessee and in course of marketing this produce, the assessee first converted the groundnut into oil and subsequently, the de-cake was converted into de-oil cake and oil was extracted by solvent extraction plant and these products were ultimately sold. The assessee collected charges from the members for the said processing. It was submitted that the entire process was that of marketing of the agricultural produce of the members and as such the inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s -- one of which was of Gujarat High Court reported in CIT v. Karjan Co-operative Cotton Sale Ginning Pressing Society Ltd. [1981] 129 ITR 821 and the other was that of Karnataka High Court in Addl. CIT v. Ryots Agricultural Produce Co-operative Marketing Society Ltd. [1978] 115 ITR 709,both of which were approved in the case of Broach Disit. Co-operative Cotton Sales, Ginning Pressing Society Ltd. 4. The submission of the departmental representative, on the other hand was that provisions of sec. 80P should be literally and strictly construed. For this proportion reliance was placed on the decision of the Bombay High Court in Vidharbha Cooperative Marketing Society Ltd.v.CIT [1985] 156 ITR 422. It was also submitted that the activit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of the agricultural produce of the members. The expression ' marketing ' cannot be confined to the activity of buying and selling only. The expression ' marketing ' is of wide import and includes performance of all business activities involves in the flow of goods and services from the point of initial agricultural production until they are in the hands of the ultimate consumer. In order to make agricultural produce fit for marketing it may have to be processed and the said activity of processing would be part of the activity of marketing and not independent activity. The marketing functions may involve all such functions such as buying and selling, physical functions such as storage, transportation, processing etc. and other commercial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concerned. As already stated the ratio of this decision has been approved by the Supreme Court in the case of Broach District Co-operative Colton Sales, Ginning Pressing Society Ltd. Consequently it must be held in the present case that as far as the activity of the assessee of extracting oil from the groundnuts of its members and selling the same was concerned, it was the activity of marketing of the agricultural produce of the assessee society and as such the whole of profits and gains arising out of such activity was exempt u/s 80(2)(a)(iii) of the Act. 6. The decision of the M.P. High Court in Keshkal Co-operative Marketing Society Ltd.'s case on which the learned D.R. has relied upon, is not applicable to the facts of the present ..... X X X X Extracts X X X X X X X X Extracts X X X X
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