9911796707
TMI Blog1986 (12) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... activity. The plea of the department was that the assessee had advanced Rs. 69,60,000 which was received from N.C.D.C. representing loan raised by it for purposes of advancing of loan on Nirman Yojna. The Nirman Yojna was for the purpose of help being provided for construction of warehouses. The cost of the warehouses were to be met by the bank to the tune of 50% which is in the shape of a loan, 5% to be met by Primary Co-operative Societies again in the shape of loan and 20% by the State Government and finally the balance of the 25% as a grant-in-aid by the National Co-operative Development Corporation. It is an understanding with the National Co-operative Development Corporation that the bank was to provide supervision and technical assis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the loss under the head 'income from other sources'. The plea of the assessee, on the other hand, was that the said project was taken up with the collaboration of Europeon Economic Council by the Government of Rajasthan. For purpose of implementation of scheme the bank was chosen. The Bank cannot carry on the business of construction of any warehouse and this was outside and the supervision of various services like technical and supervision was, therefore, clearly outside the ambit of banking activity. For purpose of carrying out this activity this bank created a cell in which staff were provided by the bank, technical staff came on deputation from PWD Rajasthan and also there were contract employment of technical persons. It was, there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing business is clearly expenses incurred on the banking business. The loss, if any, on the project is clearly relatable to the banking business and has to be set off only against the business income. Therefore, for the reasons mentioned above, we quash the order of the CIT (A) on this issue and restore that of the ITO. 6. In the cross-objection, the claim of the assessee is that it realises certain amounts as charges on account of issue of duplicate pass-books, other incidental charges on account of sale of various kinds of stationery, which is clearly used for advancement of loan etc. which have been wrongly treated as income from other sources by the CIT (A). On this issue, there is little doubt that the charges on account of issue of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
