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Section 80P of the Income-tax Act 1961 - Deductions - Income of Co-operative societies - Assessment year 1971-72 - Assessee, a co-operative society, claimed under section 80P(2) exemption of its income from credit sales to its member - Whether in view of finding of Tribunal that no income was derived by assessee from its activity of selling goods on credit, assessee was not entitled to exemption - Held, yes FACTS The assessee was a co-operative society. It claimed under section 80P(2) exemption of its income from the credit sales to its members. The claim was disallowed by the ITO. The AAC upheld the disallowance. The Tribunal further found that no income whatsoever was derived by the assessee from its activity of selling goods on credit and in this view of the matter, it dismissed the appeal. On reference : HELD From a perusal of section 80P it is clear that what is liable to be deducted from the income of co-operative societies is the amount of profits and gains of business attributable to the activities referred to in sub-clause (i ) to (vii) of clause (2) of section 80P. The provisions of clause (a )(i) of section 80P(2) were not attracted in the instant case in view of the finding of the Tribunal that no part of the income of the assessee was attributable to the activity of the assessee of selling goods on credit. Therefore, the assessee was not entitled to exemption under section 80P(2). Note : The case was decided against the assessee. JUDGMENT Sohani, J.-By this reference under section 256(1) of the I.T. Act, 1961 (hereinafter referred to as "the Act"), the Income-tax Tribunal has referred the following questions to this court for its opinion: "1.Whether, on the fact3 and in the circumstances of the case, the income derived from sale of goods on credit by the assessee to its members amounts to providing credit facilities within the meaning of section 80P(2)(a)( i) of the Income-tax Act, and whether such income is liable to be deductible under sub-section (1) of the said section in computing the total income of the assessee? 2.Whether the assessee is not entitled to the said deduction because the assessee is an Urban Consumers Co-operative Society?" The…

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