AHMEDNAGAR CENTRAL CO OP CONSUMERS WHOLESALE AND RETAIL STORES LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) BY this reference under S. 256(1) of the IT Act, 1961, made at the instance of the assessee, the Tribunal has referred the following question of law to this Court for opinion:

(2.) THIS reference pertains to the asst. year 1980 81. The assessee is a co operative society registered under the Maharashtra Co operative Societies Act and carries on trading activities with its members as well as non members. In its assessment for the asst. year 1980 81, the assessee claimed exemption in respect of the profits arising out of the trading activities carried on by it on the principle of mutuality. The ITO allowed the exemption. However, the CIT revised the order of the ITO in exercise of powers of suo motu revision under S. 263 of the IT Act, 1961 ("the Act"), as he was of the opinion that the society did not satisfy the principle of mutuality. The assessee appealed to the Tribunal against the above order of the CIT. The Tribunal dismissed the appeal of the assessee and confirmed the order of the CIT. Hence, this reference at the instance of the assessee.

(3.) WE have carefully considered the above submission of counsel for the assessee which is supported also by counsel for the Revenue. From the above submission of counsel for the assessee, it is clear that the only relief the assessee claims is exemption under S. 80P of the Act on the basis of the decision of this Court referred to above in respect of profits arising from trading activities with its members and does not want to pursue its claim on the ground of mutuality. To decide this claim of the assessee for exemption under S. 80P of the Act, we have perused S. 80P of the Act and also the decision of this Court in CIT vs. Nagpur Zilla Krishi Audyogik Sahakari Sangh Ltd. (supra). Sec. 80P, at the material time, so far as relevant, read as follows: