9911796707
TMI Blog2006 (1) TMI 192X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of income of Rs. 1,98,982 derived from services rendered by the appellant co-operative bank to nonmembers. 3. During the assessment proceedings, the Assessing Officer noted that the assessee-co-operative bank derived income from non-members for rendering following services: (1) Facilitating non-members to purchase DDs; (2) Facilitating non-members to open savings account; (3) Facilitating non-members to discount their cheques; (4) Facilitating non-members to purchase pay orders etc. The income received from the above services were in the form of Commission on OBC, Commission on CDD, Commission on Pay Orders, Commission on Demand Drafts, Commission on Daily Deposits and Miscellaneous income from non-members. The Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... --------------------------------------------- Sl. Abstract Total Members Non- %age Members No. Members Proportion- ate Receipt from non- members for the entire year --------------------------------------------------------------- 1. Commission on 6,589 0 62.00 100.00 6,589 OBC 2. Commission on 1,09,356 0 321.00 100.00 1,09,356 CDD 3. Commission on 31,367 - 2,442.00 100.00 31,367 Pay Orders 4. Commission on 11,899 - 1,748.00 100.00 11,899 Demand Drafts 5. Commission on 15,984 776 576.00 42.60 6,809 Daily Deposits 6. Misc. Income 1,78,289 14,639 12,666.50 46.39 82,708 -------- 2,48,728 --------------------------------------------------------------- 5. Aggrieved by the above, the assessee filed appeal before t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned Departmental Representative which also are available on record. However, the basic issue that we have to decide is as to whether the conjunction 'or' between the two expressions i.e., "carrying on the business of banking" and "providing credit facilities to its members" is to be read as 'and'. That is to say, as to whether banking business has to be carried on by the appellant only with its members so that profits and gains from such activity can be claimed as exempt under section 80P(2)(a)(i) of the Act. The Apex Court in the case of Mehsana District Central Co-operative Bank Ltd. v. ITO [2001] 251 ITR 522 held that income earned from utilization of reserve funds for statutory reserves under section 67(2) of the Gujarat Co-oper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used in section 10(14) of the Act. The Court held: "Section 10(14) does not use the expression "office of profit". The expression used is "office or employment of profit". The expression "of profit" qualifies only "employment", and, in our opinion does not qualify "office". The expression used in section 80P(2)(a)(i) is similar to the expression considered by the High Court in this case. 8. The Hon'ble Gujarat High Court in the case of CIT v. Baroda Peoples Co-op. Bank Ltd. [2006] 280 ITR 282 has decided the issue which is the subject-matter of appeal before us. In paras 49 to 51 of the judgment, the Hon'ble Court has held as under: "Section 80P(2)(a)(i) of the Act permits a co-operative society engaged in carrying on the business of b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor in the economic life of the country and in pursuance of the declared policy of the Government, the correct way of reading the different heads of exemption enumerated in the section would be to treat each as a separate and distinct head of exemption. Whenever a question arises as to whether any particular category of an income of a co-operative society is exempt from tax what has to be seen is whether the income fell within any of the several heads of exemption. If it fell within anyone head of exemption, it would be free from tax notwithstanding that the conditions of another head of exemption are not satisfied and such income is not free from tax under that head of exemption.' Therefore, while examining a case wherein a co-operative s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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