Law:

Section:

Section 80P of the Income-tax Act, 1961 - Deductions - Income of co-operative societies - Assessment years 1975-76 and 1976-77 - Assessee a co-operative society was formed with main object of organizing increase in sugarcane cultivation and purchase and sale of sugarcane crops at profitable price, expeditious supply of sugarcane to mills and ensuring prompt payment to farmers from mills - For fulfilment of these objects, assessee was to lend or to arrange finance for its members and interest was to be realised from members on such lendings - Whether expression 'attributable to' used in clauses (a) and (c) of section 80P(2) suggests that Legislature intended to cover receipts from sources other than actual conduct of business of assessee - Held, yes - Whether, therefore, interest earned by assessee-co-operative society from its members could be said to be covered by provisions of section 80P(2)(a)(i) and as such exempt from tax - Held, yes Words and phrases - 'attributable to' as occurring in clauses (a) and (c) of section 80P(2) of the Income-tax Act, 1961 FACTS The assessee-society was formed with the main object of organizing increase in sugarcane cultivation and purchase and sale of sugarcane crops at profitable price, expeditious supply of sugarcane to mills and ensuring prompt payment to the farmers from the mills. One of its object was to arrange funds for the fulfilment of these objects which stood incorporated in Pratiman Upvidhiyan of Sahkari Ganna Vikas Samitiyan published by the Registrar, Sugarcane Co-operative Societies and approved by the Government of Uttar Pradesh. The assessee in the course of the assessment proceedings claimed exemption under section 80P in respect of interest received from its members. The ITO rejected the claim on the ground that the business of the assessee-society was not of banking or providing credit facilities to its members. On appeal, the Commissioner (Appeals) agreed with the view of the ITO. On further appeal, the Tribunal held that the facts of the case had not been properly appreciated either by the ITO or by the Commissioner (Appeals) inasmuch as one of the main objects of the assessee was to lend to its members…

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