Law: Income Tax Act, 1961

Section: 80-P

Income-tax----Cooperative society---Special deduction---Profits and gains attributable to actual sales of specified commodities to its members is entitled to special deduction---Indian Income Tax Act, 1961, S.80-P. A plain reading of section 80-P of the Income Tax Act, 1961, makes it clear that a cooperative society is entitled to exemption in respect of its income from activities falling under section 80-P with its members to the extent indicated in the said section. 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. The original intention of the society at the time of purchase of the items is not the deciding factor. , CIT v. Nagpur Zilla Krishi Audyogik Sahakari Sangh Ltd. (1994) 209 ITR 481 (Bom.) fol. Held, that, in the instant case, it was 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. However, relief had been given under section 80-P(2)(c). The ends of justice would be met if the matter were remitted to the Tribunal to examine the claim of the assessee for deduction under section 80-P in the light of the decision of the High Court in CIT v. Nagpur Z.K.A. Sahakari Sangh Ltd. (1994) 209 ITR 481 and if the assessee was entitled to any relief over and above what had been granted to it, to allow the same. [Matter remanded.] JUDGMENT DR. B. P. SARAF, J.---By this reference under section 256(1) of the Income Tax Act, 1961, made at the instance of the assessee, the Incometax Appellate Tribunal has referred the following question of law to this Court for opinion: "Whether the applicant cooperative society is entitled to exemption from income-tax under the principle of mutuality?" This reference pertains to the assessment year 1980-81. The assessee is a cooperative society registered under the Maharasthra Cooperative 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…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492