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TMI Blog1988 (6) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... entire amount of Rs. 3,72,038 relating to marketing of agricultural produce of its members and interest on loans given to its members should be allowed as deduction under section 80P(2)(a) of the Income-tax Act, and not Rs. 73,720 with reference to the proportionate net profit referable to those activities only The facts relevant to the above question are : The Anakapalli Cooperative Marketing Society is engaged in, inter alia, (1) providing credit facilities to its members ; and (2) marketing of agricultural produce of its members. For the assessment year 1979-80, the assessee claimed that two amounts, viz., Rs. 2,84,438 and Rs. 87,600 (the total comes to Rs. 3,72,038), should be deducted under section 80P out of its gross total income. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue applied for and obtained this reference. Sub-sections (1) and (2) of section 80P, in so far as they are relevant, read as follows : "80P(1) Where, in the case of an assessee being a co-operative society, the gross total income includes any income referred to in subsection (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub-section (2), in computing the total income of the assessee. (2) The sums referred to in sub-section (1) shall be the following, namely:- (a) in the case of a co-operative society engaged in (i) carrying on the business of banking or providing credit facilities to its members, or (ii) a cottage industry, or (iii) the marketing of the agricult ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss attributable to such activities shall be deducted. There can be little doubt about the proposition that the words "gross total income" referred to in sub-section (1) of section 80P must be understood as defined in section 80B(5), which means that it is the total income computed in accordance with the provisions of the Act, but before making any deductions under Chapter VI-A or section 280-0. Now, it would be consistent and reasonable to say that the words "whole of the amount of profits and gains of business attributable to any one or more of such activities" used in the sub-section (2) must also be understood in the same sense, i.e., as the total income computed in accordance with the provisions of the Act, but before making any deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1981, and because the assessment year concerned herein is anterior to the said date, the definition has no application. Indeed, as explained by us hereinbefore, even without the said definition, that is the reasonable meaning to be placed upon the relevant words. We, therefore, hold that the Tribunal was in error in holding that the entire amount of Rs. 3,72,038 was deductible under sub-section (1) of section 80P. What is deductible is only that portion of the said amount as can be called total income attributable to the said activities as defined in clause (5) of section 80B. We may also point out that the decision of the Supreme Court in Cloth Traders (P.) Ltd. v. Addl. CIT [1979] 118 ITR 243 has since been overruled by the Supreme Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X
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