TMI Blog1991 (12) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... epairs to the property, constituted 'activities' as envisaged in section 80P(2)(c) and, on that basis, in deciding that the assessee was entitled to deduction of Rs. 20,000 in respect of the income from house property chargeable under section 22 of the said Act ?" The assessee is a co-operative society engaged in carrying on the business of banking, the income whereof is totally exempt from tax under section 80P(2)(a) of the Income-tax Act, 1961 ("the Act"). In the assessment years 1977-78 and 1978-79, in addition to income from banking business, the assessee had also income from newly constructed house property. The assessee claimed deduction of Rs. 20,000 out of the income from this activity for each of the two years by virtue of the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome from, house property chargeable under section 22 only to certain specified societies whose income does not exceed Rs. 20,000. These contentions of the Revenue were rejected by the Tribunal and the order of the Commissioner (Appeals) allowing the deduction was affirmed. Aggrieved by this order of the Tribunal, the Commissioner filed an application under section 256(1) of the Act for reference to this court and, at his instance, the aforesaid question has been referred by the Tribunal. Mr. S. K. Senapati, learned counsel for the Revenue, reiterates the stand taken by the Revenue before the Tribunal and submits that clause (c) of section 80P(2) is not applicable to the facts of the present case. We have considered the submission of lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any other case, twenty thousand rupees. Explanation.-In this clause, 'consumers co-operative society' means a society for the benefit of the consumers;..... (f) in the case of a co-operative society, not being a housing society or an urban consumers' society or a society carrying on transport business or a society engaged in the performance of any manufacturing operations with the aid of power, where the gross total income does not exceed twenty thousand rupees, the amount of any income by way of interest on securities chargeable under section 18 or any income from house property chargeable under section 22. Explanation.-For the purpose of this section, an 'urban consumers' co-operative society' means a society for the benefit of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tal income is also an activity. Income derived by way of rent from such property will undoubtedly be profits and gains attributable to the activity of constructing and letting out the house. In that view of the matter, rent received by the society from letting out the house property constructed by it can be held to be profit or gain "attributable to the activity of letting out the house". It is not necessary that such activity should be the primary activity of the society. It may be carried on by the society either independently or in addition to activities specified in clause (a) or clause (b). In the instant case, the society is engaged in carrying on the business of banking which is an activity specified in clause (a). In addition theret ..... X X X X Extracts X X X X X X X X Extracts X X X X
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