INCOME TAX ACT, 1961

Deduction under Section 80P - Income of co-operative societies -Members other than individuals

Held: Tribunal was right in holding that the assessee co-operative society was engaged in the collective disposal of the labour of its members and eligible as per section 80P(2)(a)(vi), considering facts that proviso showed that in respect of classes of members mentioned therein, the society should restrict the voting rights. The proviso does not meant that the society cannot have any other classes of members. In other words, classes of members enumerated in the proviso extracted above were only a few types of members that would have been admitted in the society and it does not mean no person not falling within the three classes enumerated in the proviso, could become member of the society. Since, assessee had restriction of voting rights of the society was only to the members. Others, who can participate in the activities of the society were not entitled to voting rights, therefore, no merit in view that the word members mentioned in sub-clause (vi) of sub-section (2)(a) of section 80P means only to individual members and not partnership firms or other AOPs.

Income-tax Act, 1961, Section 80P

A.Y. :1987-88 to 1994-95
Decision: In favour of assessee.

CIT v. Salem District Printers Service Industrial Co-Operative Society Ltd.