Satish Chandra, C.J.
1. The assessee is a co-operative society carrying on the business of supply of sugarcane. For the assessment year 1973-74, it claimed exemption of its income from securities under Clause (c) of Section 80P(2) of the I.T. Act. The Tribunal accepted the claim of the assessee. The question of law referred for our opinion is whether the income of the assessee by way of interest in Government securities is exempt under that provision.
2. Clause (c) of Section 80P(2) exempts income of co-operative societies to the extent mentioned in that section if the profits or gains are 'attributable' to the activity in which the co-operative society is engaged. The findings are that under statutory provisions the co-operative society is bound to invest 25% of its profits in Government securities. The assessee complied with this provision. In the process, it earned interest on these investments. The question is whether such profits or gains are attributable to the activity of supplying sugarcane carried on by the assessee. In Cambay Electric Supply Industrial Co. Ltd. v. CIT : 113ITR84(SC) , the Supreme Court held that the expression 'attributable to' is much wider than the expression 'derived from', The expression 'attributable to' suggests that the legislature intended to cover receipts from sources other than the actual conduct of the business of the assessee. The investment of the statutory percentage of its profits in Government securities was a condition of the carrying on of the business. The profits or gains from such investments were connected with or incidental to the carrying on of the actual business. They were, in our opinion, rightly held by the Tribunalto be attributable to the activity carried on by the assessee within the meaning of Clause (c) aforesaid. We, therefore, answer the question referred to us in the affirmative, in favour of the assessee and against the department. Since no one has appeared on behalf of the assessee, there will be no order as to costs.