9911796707
TMI Blog2014 (8) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... t Rs. 6,96,778/- received by it towards interest from investment of voluntary reserve is taxable income and it is also further prayed to direct Respondent No.1 to pass an order holding that the said income is income from banking business, and therefore, liable for exemption under Section 80P of the Income-Tax Act, 1961. 2. At the outset, it is required to be noted that the petitioner, a Cooperative Bank, filed return of income for A.Y. 1998-99 and claimed exemption under Section 80P(2)(a)(i) of the Act on the amount of interest, i.e. Rs. 6,96,778/-, received by it through investment in (1) Karnataka Bank, Rs. 1,71,301/-, (2) Sardar Sarovar Nigam Ltd. (Bonds)Rs.90,000/-, (3) Gujarat Small Scale Industrial Corporation, Rs. 4,35,477/-. The AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2)(a)(i) of the Act. Therefore, it is requested to allow the present petition. 5. Shri. Sudhir Mehta, learned Advocate appearing on behalf of the Respondent-Revenue, is not in a position to dispute the above aspect. He is not in a position to show any contrary decision to the decision of the Hon'ble Apex Court in the case of "MEHSANA DISTRICT CO. OP. BANK LTD." (Supra) or of this Court in the case of "BARODA PEOPLE'S COOPERATIVE BANK LTD."(Supra), therefore, he has requested to pass appropriate order. 6. Heard learned Advocates for the respective parties. At the outset, it is required to be noted that the question / issue involved in the present petition is now not res integra and is squarely covered in favour of the assessee in view of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both the members and non members. The interpretation canvassed by the Revenue that the latter phrase has a restrictive effect on the former expression 'business of banking' ignores the word 'or' which occurs between the two phrases. There is no warrant for reading the word 'or' as 'and'. Once legislature has used the term 'or', the logical consequence that flows from contextual setting is that it provides for an alternative, a different distinct activity. While examining a case wherein a Cooperative Society claims deduction under Section 80P(2)(a)(i) one has to bear in mind the object with which the provision is introduced viz., to encourage and promote growth of the Cooperative Sector in the economi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Act is satisfied. The provisions of the Banking Regulation Act, 1949, indicate that an entity carrying on the business of banking is not absolutely or wholly free; is amenable to supervision /regulation. In other words, its investments are subject to scrutiny; and any impermissible investment will not be permitted to continue, if made, by the regulator i.e. Reserve Bank of India. Bearing in mind that Section 80P(2)(a)(i) of the Act requires a Co-operative Society, and not a Co-operative Bank defined under the Gujarat Co-operative Societies Act, to be engaged in carrying on business of banking it is not possible to restrict the scope of the business to the definition of 'Banking' under section 5(b) of the Banking Regulation Act. Ev ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
