JUDGMENT

P. Venkatarama Reddi, J.-In all these appeals, the question for decision is whether compulsory deductions made by sugar cooperative societies on account of non-refundable and refundable deposits and other Funds are revenue receipts liable to be taxed under the Income Tax Act.

2. The appellants in the first batch of appeals are registered Cooperative Societies governed by the provisions of Maharashtra Co-operative Societies Act, 1960 and which is referred hereafter as the Act . The affairs of these Societies are regulated by the bye-laws framed or adopted by the Societies in accordance with the procedure laid down under the Act.

3. The appellant in each of the appeals carries on the business of manufacturing sugar. Its members are predominantly sugarcane farmers. According to the policy of the Government, the sugarcane growing areas in the State of Maharashtra have been divided into different territorial units. Each unit has a factory for manufacturing sugar and the sugarcane growers within the territory are obliged to sell their sugarcane only to the said factory. The project cost of the appellant was met partly by share capital and partly by way of capital subsidy provided