JUDGMENT

VENKATACHALA, J.:—As the assessee is common to all these appeals, they could be disposed of by this common judgment.

CIVIL APPEALS Nos. 793-95(NT) of 1977.

2. These are assessees appeals from the common judgment in ITR Nos. 100 of 1974, 24 of 1974 and 139 of 1974 of the Gujarat High Court reported in (1977) 107 ITR 447. The assessee, who is the appellant in these appeals, is Sabarkantha Zilla Kharid Vachon Sangh Ltd., Himat Nagar. It is a co-operative society engaged in the purchase of agricultural implements, seeds, livestock or other articles intended for agriculture, for the purpose of supplying them to its members as well as to its non-members. It filed the income-tax returns before the concerned Income-tax Officer for the assessment years 1964-65, 1965-66 and 1966-67 under the Income-tax Act, 1961 - the I.-T. Act. In those returns, it sought to claim exemption from payment of income-tax on profits and gains of its business of every assessment year, purporting to be under Section 81 (i)(d) of the I.-T. Act, as stood then. According to it, amount of profits and gains of the business carried on with its members represented its income and that income in its totality was exempt from payment of income-tax under Section 81(i)(d) of the I.-T. Act. But, the Income-tax Officer did not accede to the claim so made. He took the view that the income-tax exemption allowed to an assessee" under Sec. 81 (i)(d) of the I.-T. Act was not on the amount of gross profits and gains of business with its members but only on such portion of gross profits and gains of business includible in computation of total income under Section 110 thereof, since the income exempted from income-tax under S. 81 (i)(d) thereof was includible in the total income of the assessee as required by Section 66 thereof. The Income-tax Officer made the assessment orders, respecting all assessment years accordingly. The Appellate Assistant Commissioner, before whom the assessee preferred the appeals against the said orders of the Income-tax Officer, dismissed the appeals. The assessee took up the matters in further appeals before the Tribunal. The Tribunal allowed the first two appeals acceding" to the assessees claim that the exemption from payment of income-tax provided for under Section 8l (i)(d) of the I.-T. Act was respecting its gross profits and gains. However, it dismissed the third appeal by upholding the order of the Income-tax Officer and the order of the Appellate Assistant Commissioner. Thereafter, two questions which related to the controversy in the first two cases were, at the instance of the Revenue, referred by the Tribunal to the High Court. One of the questions was refrained, by the High Court. The questions after one of them was reframed read:

(1) Whether, on the facts and in the circumstances of the case, the finding of the Tribunal that the case of the assessee is covered by Section 8l (i)(d) only and the provisions of Section 66 read with Section 110 of the Act are not attracted is erroneous in law?

(2) Whether on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the assessee was entitled to rebate under Section 8l(i)(d) of the Act on the whole of the amount of profits of Rs. (sic) without deduction of proportionate overhead expenses?

3. The High Court which examined the said questions answered them against the assessee and in favour of the Revenue. A question covering the same controversy, which was referred by the Tribunal to the High Court, at the instance of the assessee in the third case, read:

Whether on the facts and in the circumstances of the case, the decision reached by the Tribunal that the assessee was entitled to rebate on profit on sales to the members in the manner indicated by it was correct in law, having regard to the provisions in S. 81 (i)(d) of the Act, as it stood before the amendment in the year 1968?

4. The High Court on consideration of the said question answered it against the