(1.) THE question referred to this court reads as follows :
(2.) THE assessee is a co-operative society registered under the Co-operative Societies Act. THE assessment year is 1982-83 and the corresponding accounting period was from July 1, 1980, to June 30, 1981. THE assessee was mainly engaged in the business of earning commission on the sale of potatoes of its members. Before the Income-tax Officer, a claim was made that the income earned from the commission business amounting to Rs. 3,22,697 was entirely exempt. THE officer agreed with the assessee, but observed that the expenses incurred for earning the income had to be set off in order to arrive at the net income from the commission business, which alone according to him was exempt from the tax. THE Income-tax Officer took note of the fact that the assessee was engaged in multifarious activities and all the expenses incurred by the assessee against the various activities, including commission receipts, were debited to a single profit and loss account. He was, therefore, of the opinion that the expenses for earning the commission of Rs. 3,22,697 were to be calculated on proportionate basis and to the total receipts under various activities and the expenses by applying the said principle. He worked out the proportionate expenses at Rs. 2,88,607, Thus, he arrived at the net income from the commission business at Rs. 34,090 and held that to be the amount exempt under Section 80P(2)(a)(iii) of the Act. That was upheld on appeal by the Appellate Assistant Commissioner. On further appeal by the assessee, the Tribunal agreed with the Income-tax Officer and the Appellate Assistant Commissioner and rejected the appeal. At the instance of the assessee, the above question has been referred to this court by the Tribunal.
(3.) LEARNED counsel for the assessee places reliance on the judgment of the Supreme Court in CIT v. Maharashtra Sugar Mills Ltd. [1971] 82 1TR 452. The assessee in that case was carrying on business of manufacture of sugar from sugarcane. It owns extensive lands in which sugarcane was grown. The sugarcane grown in those lands was used by the assessee for manufacture of sugar in its factory. The Tribunal has found as a fact that the cultivation of sugarcane and the manufacture of sugar by the assessee constituted one single and indivisible business. It was on the basis of such finding of fact that the court considered the question as to whether the commission paid to the managing agents was exempt from taxation. The facts of the case are thus different from the present case and the principle laid down in that case will not apply in this case.