V. RAMASWAMI, J.

The assessee, a society registered under the co-operative Societies Act, returned a total and taxable turnover of Rs. 2, 67, 10, 900.88 and Rs. 88, 91, 692.72 respectively for the asst. yr. 1968-69. They claimed exemption in respect of five items. (i) A turnover of Rs. 5, 10, 872.26 relating to the alleged incentive payment made to the cane growers included as part of the purchase price; (ii) A turnover of Rs. 92, 729.14 relating to transport charges paid to the growers included in the purchase turnover of the cane; (iii) turnover relating to sale of press-mud Rs. 7, 315.80; (iv) A turnover of Rs. 16.84 relating to sale of bagassee; (v) turnover of Rs. 4, 17, 422.45 relating to sugar cane standard mixture. The AO disallowed the claim of exemption in respect of all the five items. On appeal, the AAC held that only the sum of Rs. 5, 10, 872.26, the alleged payment of incentive bonus and the sum of Rs. 92, 729.14, the transport charges paid by the assessees were liable to be included in the taxable turnover, but allowed the claim of exemption in respect of the other three items. The assessee preferred an appeal to the Tribunal. The State also filed petition