Law:

Section:

Section 14(3)(iv) of Indian Income-tax Act, 1922, read with section 81(v) (now section 80P(2)(f)) of Income-tax Act, 1961 - Deduction - Income of co-operative societies - Assessment years 1961-62 & 1962-63 - Assessee, a co-operative society, carrying on banking business and trading operations and other activities, derived interest on securities and income from its properties and claimed exemption under section 14(3)(iv) of 1922 Act and section 81(v) of 1961 Act for relevant assessment years - Whether since assessee was an Urban Consumers' Co-operative Society within meaning of both 1922 Act and 1961 Act, it was not entitled to exemption in respect of its income from interest on securities and from property - Held, yes FACTS During the previous years relevant to the assessment years 1961-62 and 1962-63, the assessee, a co-operative society carrying on the business in banking and trading operations and other activities, derived interest on securities and income from its properties in respect of which it claimed exemption under section 14(3)(iv) of 1922 Act for the assessment year 1961-62 and under section 81(v) of 1961 Act for the assessment year 1962-63. The finding of the ITO who refused the exemption sought by the assessee was that the total income of the assessee did exceed twenty thousand rupees. But that finding was reversed by the AAC, who recorded a finding that such total income did not exceed twenty thousand rupees, and that finding was also affirmed by the Tribunal. But the ITO refused the exemption on the additional ground that the assessee was an urban consumers' society within the meaning of that expression occurring in both the Acts and that view taken by him was shared by the AAC and the Tribunal. On reference : HELD It would not be right to understand the expression 'urban consumers' society' occuring in the 1961 Act, and the 1922 Act in the way in which the consumers' society has been defined by either the Delhi Co-operative Societies Act or by the Maharashtra Co-operative Societies Act. Those definitions are definitions for the purposes of those Acts only and should not be read into the 1922 Act or the 1961 Act, since those Acts themselves…

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