M.C. Agarwal, J. - (1.) IN pursuance of the directions of this court under Section 256(2) of the INcome-tax Act, 1961, the INcome-tax Appellate Tribunal, Allahabad Bench, Allahabad, has referred the following question arising from the Tribunal's order dated June 18, 1975, for the assessment year 1972-73 for the opinion of this court : "Whether, on the facts and in the circumstances of the case, the Tribunal's decision is vitiated in law ignoring the material on record and in holding that the federation was providing credit facilities to its members through its own resources also besides arranging loans to the farmers from the financing institutions ?"
(2.) WE have heard Sri Shekhar Srivastava, learned standing counsel for the Revenue, and Sri Vikram Gulati, learned counsel for the assessee-respondent. The assessee is a co-operative society. During the year under consideration, it derived income, inter alia, by charging service charges for the supply of pump sets by one Southern Engineering Works to the cane growers. The cane growers were not members of the assessee-co-operative society, but were members of a union which in its turn was a member of the asses see-society. The question is whether the income of the assessee from the said source is exempt from tax under Section 80P(2)(a)(i) of the Income-tax Act, 1961. The Income-tax Tribunal, following its order for the assessment year 1971-72, held that the assessee was entitled to exemption. In relation to the assessment year 1971-72, the controversy came to this court and the Tribunal had referred the following question for the opinion of this court (see [1980] 122 ITR 914) : "Whether, on the facts and in the circumstances of the case, the assessee was entitled to exemption under Section 80P(2)(a)(i) of the Income-tax Act, 1961, for income from press and income from supply of pump sets ? "
(3.) THIS court, in a detailed judgment in CIT v. U. P. Co-operative Cane Union Federation Ltd. [1980] 122 ITR 913 held that the cane growers cannot be treated as members of the assessee-society and since the business of the assessee in providing credit facility to the cane growers for the purchase of pump sets did not amount to providing credit facility to the members of the assessee-society, its income from service charges in respect of the said transactions was not exempt from tax under the aforesaid provisions. Admittedly, the facts and circumstances for the year under consideration were the same and in view of the aforesaid decision of this court, the question, though differently framed, has to be answered in the affirmative and in favour of the Revenue and we hold that the assessee's income from service charges realised from cane growers for arranging credit facilities for them for the purchase of pump sets was not exempt from tax under Section 80P of the Act. Learned counsel for the assessee-respondent placed reliance on CIT v. Tamil Nadu Co-operative Marketing Federation Ltd. [1983] 144 ITR 74 (Mad), which is not applicable to the facts of the case as the controversy was of a different nature. In that case, the assessee was an apex co-operative society, being a federation of primary co-operative societies. The assessee was dealing with such member societies and the question was whether it was entitled to exemption under Section 80P(2)(a)(iv). It was held that the benefit of the exemption was not restricted to primary cooperative societies.;