2004 (7) TMI 57

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.... stated the facts giving rise to the present reference are as follows: The references arise under the Act for the assessment years 1978-79 and 1979-80 for which the relevant previous year ended on June 30, 1977, and June 30, 1978, respectively. The assessee was registered on March 31,1975, as a co-operative society with the Registrar of Sugarcane Co-operative Societies, U.P., Lucknow. Its object was primarily to set up a sugar mill. For this purpose, it collected funds from its members and from the Government as subsidy. The Tribunal was told that till the end of the previous years, relevant to the assessment years under reference, the sugar mill had not been set up. Whatever were the receipts, they were on account of investment of it....

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....r making of the income under the head "Other sources", they could not be allowed as deduction in determining the income from that source. The Tribunal dealt with the matter in para. 8 of its order in the following words: "8. We have carefully considered the rival submissions. It is not under dispute that the assessee is a co-operative society, which has not complied with the various statutory requirements of a co-operative society. For this purpose, the maintenance of a registered office and some staff is necessary for the very existence of the co-operative society. Such expenses, which are of bare necessity for the very existence of the co-operative society cannot be ignored in working out the income under the head 'Other sources'. B....