Judgment

Rajendra Babu, J.-We have heard a batch of cases in which the ques­tion raised for our consideration is whether the assessee under the Income Tax Act which are Co-operative Societies are entitled to deduc­tion under Section 80P(2)(a)(iii) of the Income Tax Act, 1961 in respect of the purchases made from member societies?

2. For purposes of convenience we shall set out the facts and decide one of these cases, number, C.A. No. 506 of 1994, filed by the Kerala State Cooperative Marketing Federation Limited and apply the result thereto in other matters. The society in question is registered under the Kerala Co-operative Societies Act and is an assessee under the Income Tax Act. For the assessment year 1980-81, the assessee claimed exemption under Section 80P (2)(a)(iii) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) in respect of profits earned by it out of the purchases made from the member societies. The assessee which is an apex society purchased cashew from the primary cooperative societies who are its members. The total purchases made by it were to the extent of Rs. 33,23,71,339/- out of which the purchases from member societies was in a sum of Rs. 95,02