Law: Income Tax Act, 1961

Section: 80,80-P,256

Indian Income Tax Act, 1961)]......Reference---Cooperative society---Special .deduction---Profit from purchase and supply of fertilizers to members- --Special deduction whether allowable on gross profits after deduction of proportionate expenses---Question of law---Indian Income Tax Act, 1961, Ss.80-P & 256. Held, that the question whether, on the facts and in the circumstances of the case, exemption in respect of income from the purchase and supply of fertilizers by the assessee-society to its members is allowable on the gross profits after deducting proportionate expenses under section 80-P(2)(a)(iv) of the Income Tax Act, 1961, was a question of law to be referred to the High Court. Sabarkantha Zilla Kharid Vechan Sangh Ltd. v. CIT (1993) 203 ITR 1027 (SC) ref. JUDGMENT N.K. AGRAWAL, J.---This is a petition under section 256(2) of the Income Tax Act, 1961 (for short "the Act"), by the Commissioner of Income-tax to the Appellate Tribunal, Delhi, to refer, the following question of law to this Court for opinion: "Whether, on the facts and in the circumstances of the case, the income-tax Appellate Tribunal was right in law in allowing the deduction under S.80-P(2)(a)(iv) of the Act, on the gross profit from sale of fertilizers to its members?" . The assessee was a cooperative marketing society and derived income from the sale of fertilizers, sugar, etc. While making the assessment for the assessment year 1981-82, the Assessing Officer reduced the amount claimed by the assessee-society as exempt income earned from the supply of fertilizers to its members. Income from the purchase of fertilizers for the purpose of supplying the same to the members of the society was exempted under section 80-P(2)(a)(iv) of the Act. Such income was shown by -the assessee at…

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