TaxTMI 
TaxTMI 
TaxTMI 
1997 (1) TMI 7
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....P(2)(a)(i) of the Income-tax Act, 1961, for income from press and income from supply of pumping sets ?" These appeals relate to the assessment years 1971-72 and 1972-73. The U. P. Co-operative Cane Union Federation Ltd. (hereinafter referred to as "the Federation"), is a co-operative society registered under the U. P. Cooperative Societies Act, 1965 (hereinafter referred to as "the Co-operative Societies Act"). The members of the Federation are cane unions which are also co-operative societies and the members of these cane unions are individual cane growers. No individual cane grower is a member of the Federation. The Federation had sponsored an irrigation scheme for small farmers whereunder loan applications of the cane growers were forwa....
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.... in appeal, by the Appellate Assistant Commissioner. But, on further appeal, the Tribunal has upheld the claim of the Federation for exemption under section 80P(2)(a)(i) on the view that the individual cane growers can be regarded as members of the Federation and that the Federation was providing credit facility to its members. The Tribunal was, however, of the view that section 80P(2)(a)(iv) could not be invoked by the Federation because it had not purchased any pumping set nor had it supplied such sets to the cane growers. On being moved by the Revenue, the Tribunal referred the abovementioned question for the opinion of the High Court. The High Court has examined the matter in the light of the provisions of section 80P(2)(a)(i) of the A....
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.... On behalf of the Revenue, Dr. Gauri Shankar has submitted that the High Court has rightly construed the expression "members" in section 80P(2)(a)(i) in the light of the definition of the said expression contained in section 2(n) of the Co-operative Societies Act and that since the cane growers were not members of the Federation, the High Court has rightly held that the benefit of section 80P(2)(a)(i) of the Act could not be extended to the Federation. Dr. Gauri Shankar has invited our attention to the recent decision of this court in Assam Co-operative Apex Marketing Society Ltd. v. CIT (Addl.) [1993] 201 ITR 338. The relevant part of section 80P(2)(a)(i) of the Act is reproduced as under : "80P. Deduction in respect of income of co-oper....
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....y." It is not disputed that as per the said provision the members of the Federation were the cane union co-operative societies only. The individual cane growers who were members of the cane growers unions were not members of the Federation. In this context, it may be mentioned that in clause (b) of sub-section (2) of section 80P, reference has been made to primary society as well as federated co-operative societies which indicates that while enacting section 80P, Parliament was conscious of the distinction between the various types of co-operative societies that are functioning in the country, namely, the federated co-operative societies and primary societies. In section 80P(2)(a)(i), when Parliament has used the expression "members", it h....
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....e not the members of the apex society but were the members of the co-operative societies which were members of the apex society. It was held that the said expression would not cover the agricultural produce of the growers. It has been observed: "A reading of clause (i) of section 81 shows that the idea and intention behind the said clause was to encourage basic level societies engaged in cottage industries, marketing agricultural produce of its members and those engaged in purchasing and supplying agricultural implements, seeds, etc. to their members and so on. The words 'agricultural produce of its members' must be understood consistent with this object and if so understood, the words mean the agricultural produce produced by the members.....