Law:

Section:

Section 80P(2)(e) of the Income-tax Act, 1961 - Deductions - Income of co-operative societies - Whether commission received by assessee, a co-operative society, from Food and Civil Supplies Corporation for procurment of paddy and rice and reimbursement of transport charges in relevant assessment year was eligible for deduction under section 80P(2)(e) - Held, no Facts For the relevant assessment year the assessee, a cooperative society, claimed deduction under section 80P(2)(e) in respect of its income derived as commission from the Food and Civil Suplies Corporation for procurement of paddy and rice and reimbursement of transport charges. The ITO held that exemption under section 80P(2)(e) was not available to the assessee. On appeal, the Tribunal upheld the order of the ITO. On reference : Held The income derived by a co-operative society for the purpose of exemption under section 80P(2)(e) must be relatable to the letting out or the use of godowns or warehouses. Any income derived by the society unconnected with such letting out or use of the godowns or warehouses will not fall under clause (e). In the instant case, the said income was not earned by the assessee from letting out of godowns or warehouses for the purpose of storage, processing or facilitating the marketing of commodities, and therefore, the assessee was not justified in claiming exemption under section 80P(2)(e ). Cases referred to Surat Vankar Sahakari Sangh Ltd. v. CIT [1971] 79 ITR 722 (Guj.) and CIT v. South Arcot District Co-operative Marketing Society Ltd.[1973] 92 ITR 371 (Mad.). S.P. Bhat for the Applicant. K. Srinivasan and H. Raghavendra Rao for the Respondent. ORDER Venkatesh, J.-This is a reference under section 256(1) of the Income-tax Act, 1961 ('the Act'). The question referred is as under : "Whether, on the facts and in the circumstances of the case, the Tribunal is justified in law in not exempting the assessee's income of Rs. 1,20,206 under section 80P(2)(e) of the Income-tax Act, 1961 ?" The asssssee is a co-operative society. It claimed exemption under section 80P(2)(e) of the Act regarding its income of Rs. 1,20,206 for the assessment year 1973-79. According to the assessee…

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