COMMISSIONER OF INCOME TAX vs CO-OPERATIVE SUPPLY and COMMISSION SHOP LTD.

B. R. ARORA, J :

The Revenue, by this application under s. 256(2) of the IT Act has prayed that the Tribunal, Jaipur Bench, Jaipur, may be directed to refer the following question of law for the opinion of the High Court as it arises out of the Tribunals judgment dt. 18th July, 1990 :

"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the interest received by the co-operative society from 13 businessmen (non-members) on outstanding balances could qualify for exemption under s. 80P(2)(a)(i) of the IT Act, ?"

The contention of the learned counsel for the Revenue is that when the same question in the case of the assessee itself for the other assessment years has already been referred by the Tribunal under s. 256(1) of the Act for the opinion of the High Court then the Tribunal was not justified in rejecting the application and the petition filed under s. 256(1) of the Act and refusing to make a reference.

We have considered the submissions made by the learned counsel for the Revenue.

The Tribunal refused to make the reference on the ground that the question framed by the learned CIT(A), Jodhpur, does not arise from the order of the Tribunal. We have seen the order passed by the Tribunal. The question, which was sought to be referred, does not arise out of the order passed by the Tribunal. Even otherwise, in the case of the assessee itself, in DB IT Ref. No. 2 of 1988 decided on 13th Nov., 1995 - CIT vs. Co-operative Supply Commission Shop Ltd. (1996) 133 CTR (Raj) 38 for the asst. yr. 1977-78, an identical question was referred for the opinion of the High Court, which was decided by this Court in favour of the assessee. The question, which is sought to be referred, is identical with the question which came up for consideration before this Court in the case of Commissioner of Income Tax Vs. Co-operative Supply and Commission Shop Ltd., and the question was answered as under :

"The basic requirement of s. 80P(2)(a)(i) of the IT Act, 1961 is that the society must be engaged in carrying on the business of banking or providing credit facilities to its members. Sec. 5(b) of the Banking Regulation Act, 1949, defines banking as accepting, for the purpose of lending or investment, of deposits of money from the public, payable on demand or otherwise and withdrawal by cheque, draft, order or otherwise, in order to constitute the business of banking, it is necessary that these activities must be the main source of income of the society. It is equally true that the words which are used in one particular clause have to be given the same colour and understood as forming part of one genus of which they may be different species. The words, providing credit facilities would, therefore, have to be interpreted to comprehend the business of lending services of credit facilities in connection with the business of banking. The facility of selling goods on credit to its members by a co-operative society which is incidental to the business of selling goods will not amount to providing credit facilities in the nature of the business of banking so as to amount to carry on the business of banking or providing credit facilities to its members. Sec. 80P(2)(a)(i) is meant to cover the societies which are carrying on the business of banking and in the course of their business are providing credit facilities to its members."

The controversy involved in the present case stands concluded by the judgment of this Court given in the aforesaid case of the assessee itself for the asst. yr. 1977-78. In this view of the matter, we do not find any merit in this application under s. 256(2) of the Act and no referable question of law is made out because the question sought to be referred stands decided by the Division Bench judgment of this Court, as aforesaid.

In this view of the matter, no case of calling a reference is made out. The application under s. 256(2) of the IT Act, is, therefore, dismissed.