| Case ID |
09a60876-3c04-4e4b-b1b1-fb1d048c0819 |
| Body |
View case body. Login to View |
| Case Number |
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| Decision Date |
Aug 10, 1978 |
| Hearing Date |
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| Decision |
The court held that the activities of the co-operative society, which involved processing agricultural produce with the aid of power before marketing, still entitled it to the exemption under section 81(i)(c) of the Income-tax Act, 1961. The court emphasized that the term 'marketing' encompasses all activities related to the sale of goods, including processing and transportation. Therefore, even if the goods were processed with the aid of power, it did not negate the marketing function that the society performed. The Tribunal's ruling in favor of the assessee was affirmed, allowing the exemption claimed under the relevant provision of the law. |
| Summary |
In the case before the Karnataka High Court, the central issue revolved around the interpretation of section 81(i)(c) of the Income-tax Act, 1961, concerning the tax exemption for income derived by co-operative societies from marketing agricultural produce. The case involved the Ryots Agricultural Produce Co-Operative Marketing Society Ltd. which claimed that its income from marketing rice and oil, derived from the produce of its members, should not be taxable due to the provisions of the Act. The Income Tax Officer had initially rejected this claim, arguing that the processing of the agricultural products was done with the aid of power, thus disqualifying the society from the exemption. However, the Appellate Assistant Commissioner allowed the claim, and this decision was upheld by the Tribunal. The High Court ultimately ruled that the processing of goods does not negate the marketing function, reaffirming the Tribunal's decision. The case highlights important aspects of tax law related to co-operative societies and the broader definition of marketing, which includes various activities from production to sale. This ruling is significant for co-operative societies engaged in similar activities and reinforces their entitlement to tax exemptions under specific conditions. Keywords like 'Income-tax Act', 'co-operative societies', 'tax exemption', 'marketing agricultural produce', and 'Karnataka High Court' are essential for understanding and searching for related legal precedents. |
| Court |
Karnataka High Court
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| Entities Involved |
Ryots Agricultural Produce Co-Operative Marketing Society Ltd.
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| Judges |
E.S. Venkataramaiah,
M.K. Srinivasa Iyengar
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| Lawyers |
S.R. Rajasekharamurthy,
G. Sarangan
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| Petitioners |
Addl. Commissioner of Income Tax
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| Respondents |
Ryots Agricultural Produce Co-Operative Marketing Society Ltd.
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| Citations |
1978 SLD 818 = (1978) 115 ITR 709
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| Other Citations |
Surat Vankar Sahakari Sangh Ltd. v. CIT [1971] 79 ITR 722 (Guj.),
U.P. Co-operative Bank Ltd. v. CIT [1966] 61 ITR 563 (All.)
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| Laws Involved |
Income-tax Act, 1961
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| Sections |
81(i)
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