TMI Blog1982 (8) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... types of members such as (i) individual members, (ii) associate members, (iii) nominal members, and (iv) sympathiser members. During the year in question the assessee-society had 273 individual members, 68 sahakari sanstha members (i.e., primary societies), 275 nominal members, one State Government member and 10,572 cotton cultivator nominal members. During the years under appeal, the assessee-society, earned income by commission from the Maharashtra State Co-operative Marketing Federation Ltd. on account of marketing the cotton of their cultivator members to the said Federation. The total amount of commission accrued during the year from marketing the cotton of cultivator members amounted to Rs. 2,59,678. The assessee-society has also earned the profit on sale and supply seeds, pump sets, pesticides, etc., to the primary societies. The profit earned on sale and supply of goods to the primary society members during the year amounted to Rs. 73,273. On these transactions of sale and supply, the assessee also earned Rs. 35,926 by way of commission from the dealers from whom the goods were purchased for supply to the primary society members, nominal members and individual members. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l for the assessee, apart from reiterating the submissions made during the course of of assessment proceedings, further submitted that the cultivators and the nominal members are members of the society for all practical purposes. It is vehemently argued that the nominal members and the cotton cultivator members figure in the list of members and all such members have contributed capital though in the case of cotton cultivator members, it is by way of deduction of 1 per cent out of sale price payable to them for the cotton procured. This, however, is in no way prejudicial to the claim of the assessee. Regarding the ground of disallowance of Rs. 1,19,132 under section 80P(2)(a)(iv), it was contended by the learned counsel for the assessed that in the instant case there was unmistakably a sale of goods to the primary societies. Even if it was felt that this was not a case of sale, there was certainly a supply of goods. The counsel for the assessee submitted that in section 80P(2)(a)(iv) the expression used is 'supply'. The assessee's counsel further explained the modus operandi of the transactions of sales by the assessee-society to the primary societies, namely, Sahakari Sewa Sansth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct that according to him nominal members could not be equated with regular members and in view of the fact that he has 'held that the so-called supplies to the primary societies' members are in reality to the cultivators who are non-members of the assessee-society, he gave direction to the ITO to withdraw reduction of Rs. 2,128, as according to him it was wrongly allowed in the assessment. 4. As against this order of the Commissioner (Appeals) the assessee is in appeal before us. The learned counsel for the assessee besides reiterating the contentions made before the lower authorities further contended that the word 'member' used in section 80P is not defined in the Act. Section 80P deals with exemption to co-operative societies. Though the word 'member' is not defined in the Act, it has been defined in section 2(19) of the Maharashtra Co-operative Societies Act which is inclusive definition and includes nominal, associate and sympathiser members. According to him, therefore, there is no basis for restricting the meaning only to the category of regular members and exclude other categories of members. The word 'member' according to him must be given its natural and liberal meaning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and who is authorised to take delivery of the goods. The permit also mentions the monetary limit within which the goods should be supplied. Out of four copies of the permit, one copy is retained by the primary society and three copies are delivered to its members. The said member of the primary society then approaches the assessee-society. The assessee-society retains one permit, deliver one permit to the cultivator and send one permit to the bankers of the primary society. On the basis of the said permit issued by the primary society, the assessee-society delivers the goods to the same individual. The assessee-society does not recover any price from the individual. The assessee-society recovers price from the bankers of the primary societies. On the basis of the aforesaid procedure, the learned counsel for the assessee contended that there is a contract of sale between the assessee-society and the primary society whereby the assessee transfers the property in goods to the buyers for price. The price is paid to the assessee-society by the primary society. The assessee-society has no right to recover the price from the members of the primary society. As has been seen above, the pric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h deals with deduction in respect of income of co-operative societies uses the word 'member'. Thus even though the word 'member' has not been defined under the Act, we can usefully refer to the definition of the word 'member' as used in the Maharashtra Co-operative Societies Act, 1960. The word 'member' has been defined in section 2(19) of the said Act as follows : "(a) 'member' means a person joining in an application for the registration of a co-operative society which is subsequently registered, or a person duly admitted to membership of a society after registration, and includes a nominal, associate or sympathiser member ; (b) 'associate member' means a member who holds jointly a share of a society with others, but whose name does not stand first in the share certificate ; (c) 'nominal member' means a person admitted to membership as such after registration in accordance with the bye-laws. (d) 'sympathiser member' means a person who sympathises with the aims and objects of the society and who is admitted by the society as such member." From the above definition, it will be seen that the definition of word 'member' is an inclusive one and includes nominal, associate or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ery of goods. It says : "Delivery of goods sold may be made by doing anything which the party agrees shall be treated as delivery or which has the effect of putting the goods in the possession of the buyer or of any person authorised to hold them on his behalf." In the present case, we have seen that on the basis of the permits referred to above it is clear that the order is placed by the primary societies and in the said permits it directs the assessee-society to deliver the goods mentioned therein and it is on the basis of the permit the assessee delivers the goods to the individual named in the permit issued by the primary society. It is in pursuance of these permits the goods are delivered. Therefore, in law, it is a delivery of goods by the assessee-society to the primary society. Further, the payment of price of the goods is by the primary society to the assessee-society as established by the certificate of the District Central Co-operative Bank. The property in goods also passes from the assessee-society to the primary society. The rules regarding passing of goods in the property are stated in sections 19 to 24 of the Sale of Goods Act. From the foregoing provisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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