JAWAHAR LAL GUPTA,J. - (1.) THE Tribunal has referred the following question for the opinion of this Court : "Whether, on the facts and circumstances of the case, the Tribunal was right in law in holding that the contribution of Rs. 21,205, Rs. 47,434 and Rs. 68,633 received by the assessee for the relevant asst. years 1977 78, 1978 79 and 1979 80, respectively, from its members was not exempt on the principle of mutuality?"
(2.) THE petitioner assessee is a co operative society. It provides technical advice to the member societies in lieu of the subscriptions. The petitioner received contributions from its members during the three years as noticed above. It claimed that the contributions made by the member societies were not exigible to the levy of income tax by the principle of mutuality. The AO rejected the claim. The order having been confirmed by the AAC and the Tribunal, the assessee filed a petition under S. 256(1) of the IT Act, 1961. Hence, this reference. Mr. Garg, learned counsel for the petitioner, contends that in view of the provisions of S. 59(k) of the Punjab Co operative Societies Act, 1961, as also the rules and bye laws, the assessee has complete control over the funds. The activity cannot be described as a trade or profession and the contributions by the members to the assets of the petitioner do not constitute profits and gains of business or profession. Reliance has been placed on the decision of a Bench of this Court in CIT vs. Northern India Motion Pictures Association (1989) 79 CTR (P&H) 54 : (1989) 180 ITR 160 (P&H) : TC 38R.572 and to the pronouncement of the apex Court in Chelmsford Club vs. CIT (2000) 159 CTR (SC) 235 : (2000) 243 ITR 89 (SC).
(3.) THE claim made on behalf of the assessee has been controverted by Mr. Sawhney, learned counsel for the Revenue.;