These appeals, by special leave, are directed against the judgment of the Allahabad High Court whereby the following question which was referred to it for opinion by the Income Tax Appellate Tribunal hereinafter referred to as the Tribunal has been answered against the assessee and in favour of the Revenue Whether on the facts and in the circumstances of the case, the assessee was entitled for exemption under Section 80P 2 a i of the Income Tax Act, 1961 from income from press and income from supply of pumping sets ?
In respect of the assessment year 1972 73, the amount received as 5 service charges was Rs.
The High Court has examined the matter in the light of the provisions of Section 80P 2 a i of the Act and has found that the Federation was engaged in providing credit facilities to the cane growers.
23,374/ for which similar exemption was claimed.
But the High Court has held that the said facilities were number provided by the Federation to its members since the cane growers companyld number be regarded as members of the Federation.
These appeals relate to the assessment years 1971 72 and 1972 73.
The said claim of the Federation was rejected by the Income Tax Officer and the said order was affirmed, in appeal, by the Appellate Assistant Commissioner.
Being aggrieved by the said decision of the High Court, the Federation has filed these appeals.
On being moved by the Revenue, the Tribunal referred the above mentioned question for the opinion of the High Court.
During the assessment year 1971 72, the Federation received Rs.
The Federation had sponsored an irrigation scheme for small farmers whereunder loan applications of the cane growers were forwarded to the State Bank and the Central Bank for India for purchase of pumping sets.
55,098/ as 5 service charges from the supplier of the pumping sets and the Federation claimed exemption from tax on the said amount under Section 80P 2 a i and iv of the Income Tax Act, 1961 hereinafter referred to as the Act .
On that view, the High Court has answered the question referred against the Federation and in favour of the Revenue and has held that the Federation companyld number claim exemption under Section 80P 2 a i of the Act.
to promote the growth of agricultural production of cane by the cane growers, and the object underlying the grant of exemption under Section 80P 2 a i , the expression members in the said provision should be companystrued liberally to mean that individual cane growers were members of the Federation.
The loan was to be provided to the extent of 75 of the purchase price and the balance 25 and other expenses were to be met by the cane grower and was repayable in instalments and the Federation agreed to undertake the entire responsibility of making prompt payment within seven days from the date of invoice of the distributors or dealers for the sale of pumping sets.
The U. P. Co operative Cane Union Federation Ltd. hereinafter referred to as the Federation is a companyoperative society registered under the U. P. Co operative Societies Act, 1965 hereinafter referred to as the Co operative Societies Act .
The members of the Federation are cane unions which are also companyoperatives societies and the members of these cane unions are the individual cane growers.
In companysideration of these services the suppliers paid 5 of the price of the pumping sets to the Federation.
