Co-operative society payments to members sustained as part of co-operative activity, defeating Revenue's challenge to additions and disallowance.

Payments made towards sugarcane purchase price were found, on the facts, to have been made to members rather than nominal members, so the Tribunal treated the distribution as arising in the course of co-operative activity and saw no basis to disturb the first appellate authority's relief. The same factual position applied in the later assessment year, with no distinguishing feature shown, so the Revenue's challenge to the deletion of additions and disallowance, including the claim under section 80P(2)(d), failed and the deletions were sustained.

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Issues: Whether the Revenue's challenge to the deletion of additions and disallowance relating to payments made to members and the claim under section 80P(2)(d) was sustainable.

Analysis: The Tribunal found, on the material placed before it, that the payments towards sugarcane purchase price were made to members and not to nominal members. On that basis, the amount paid was treated as a distribution among members in the course of the co-operative activity, and the Tribunal found no reason to disturb the relief granted by the first appellate authority. The same factual position was held applicable to the subsequent assessment year as well, there being no distinguishing feature warranting a different view.

Conclusion: The Revenue's grounds were rejected and the relief granted by the first appellate authority was sustained.

Final Conclusion: The additions and disallowance deleted by the first appellate authority remained deleted, and both Revenue appeals failed.

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