TMI Blog1989 (3) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... , in accordance with and subject to the provisions of this section, the sums specified in subsection (2), in computing the total income of the assessee. (2) The sums referred to in subsection (1) shall be the following, namely: (a) in the case of a co-operative society engaged in.. (iii) the marketing of the agricultural produce of its members, or.. ." The point at issue is whether these provisions render non-taxable the profits earned by the assessee, Haryana State Co-operative Supply and Marketing Federation Limited, by the sale of wheat-gram and other agricultural produce. Before proceeding further, it deserves mention that the members of the assessee-federation are district wholesale co-operative societies or other co-operative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in exempting from income tax the income of Rs. 9,35,108 from the purchase and sale of wheat, etc., under section 80 P (2) (a) (iii) of the Income-tax Act, 1961 ? " The judicial precedents support both the views projected with regard to the interpretation of section 80 P (2) (a) (iii) of the Act. On behalf of the Revenue, reliance was placed upon the judgment of the High Court of Madhya Pradesh in CIT v. Kisan Co-operative Rice Mills Ltd. [1976] 103 ITR 264, where this question arose in the context of the co-operative societies purchasing paddy from its members and then milling it and selling it as rice. It was held that the income arising ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al produce grown by its members" and, therefore, so long as the commodity brought to the assessee-society was agricultural produce and the produce belonged to its members, it was the agricultural produce of its members. The concept was of ownership of the agricultural produce and, therefore, the commission received by the assessee from its members was exempt under section 80P(2)(a)(iii) of the Act. It was also observed that the concept of "marketing" in section 80P(2)(a)(iii) of the Act included all activities connected with the process of taking over the agricultural produce of the members and handing over marketable commodities to the purchasers and all the intermediate processes connected with the marketing of the agricultural produce of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es involving transfer of ownership (a) buying; (b) selling. (2) Activities involving physical supply: (a) transportation; (b) storage. (3) Activities facilitating the foregoing functions (a) standardisation and grading; (b) financing ; (c) risk taking; (d) market research." A similar view with regard to "marketing" is to be found in CIT v. Gujarat State Warehousing Corporation [1980] 124 ITR 282 (Guj) and Addl. CIT v. Ryots Agricultural Produce Co-operative Marketing Society Ltd. [1978] 115 ITR 709 (Kar). The assessee further supports its stand by referring to the judgment of the High Court of Delhi in ITR No. 241 of 1975 (CIT v. National Agricultural Co-operative Marketing Federation Ltd., Delhi), decided on April 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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