9911796707
TMI Blog2016 (10) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... 1% commission thereupon the paper book contains franking machine authorisation as issued by the Chief Controlling Revenue authorities, Gujarat State, Gandhi Nagar. We notice that this amounts to conferring the assessing authority of an agent of State Government as provided under section 6(1)(b) of the Banking Regulations Act hereinabove. We accept assessee’s arguments by quoting Hon’ble apex Court’s decision hereinabove to hold it entitled for the impugned section 80P deduction. Interest income on loans given to employees - Both the lower authorities hold that the same is not admissible in case of interest earned from employees as per decision in CIT vs. Sirohi SBV Bank Ltd [2008 (9) TMI 112 - HIGH COURT RAJASTHAN ]. They nowhere hold that the said employees are not assessee’s members. The CIT(A) deals with this aspect to observe that the assessee has advanced the impugned loans to its nominal members. We have perused section 25 of the Gujarat State Co-operative Society’s Act 1961 prescribing such nominal members. There is nothing in section 80P of the Act to the contrary so as to decline the impugned deduction. We reiterate that it is a deduction provision to be liberally cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness. He concluded on the third issue of interest on loans given to employees that the same was not allowable under section 80P of the Act. 4. The CIT(A) confirms Assessing Officer s action on all three counts as under :- 3.3 I have considered the facts of the case, assessment order and appellant's submission. Assessing officer did not allow deduction under section 80P to the appellant on following incomes treating the same as not part of banking business 1- GEB Bill collection commission ₹ 72,240 2- D mat charges ₹ 1,58,61,020 3- Commission on special adhesive stamps ₹ 36,30,480 4- Interest on loan given to employees ₹ 23,44,098 Since rule 6 (1) of banking regulation act starts with in addition to the business of banking assessing officer treated other activities referred above as nonbanking activities and did not allow deduction under section 80 p. It is not in dispute that all the activities undertaken by the banks or permitted for the bank by RBI are not banking activities. Banking activity involves deposit and lending of money and therefore all other activities undertaken by the bank cannot be treat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant is not entitled to claim deduction under section 80 P on this income. The disallowance is therefore confirmed. 3- As regards income on account of special adhesive stamp, this activity also started much later and the same is not mentioned in rule 6 (1). The services can be provided by stamp vendors or any person authorized to provide the services. These are not exclusively provided by banks therefore if cannot be said that income from the service is from banking business. Since there is no banking activity involved in selling special adhesive stamps and these are not incidental to the business of banking, such income cannot be considered as part of banking business. Accordingly the deduction claimed by the appellant is not correct and addition made by the assessing officer is confirmed, 4- As regards interest on loan earned from employees, the issue is covered against the appellant by the decision of Rajasthan High Court referred by the assessing officer. The decision is dated 17-12-2008. It is held that assessee bank cannot treat its own staff as members of the society and interest income earned by advancing housing loans and loans from PF deposits cannot be exempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crips or other forms of securities on behalf of constituents or others; the negotiating of loan and advances; the receiving of all kinds of bonds, scrips or valuables on deposit or for safe custody or otherwise; providing of safe deposit vaults; the collecting and transmitting of money and securities; (b) acting s agents for any government or local authority or any other person or persons; the carrying on of agency business of any description including the clearing and forwarding of goods, giving of receipts and discharges and otherwise acting as an attorney on behalf of customers, but excluding the business of a [Managing Agent or Secretary and Treasurer] of a company. 6.1 A perusal of the above extracted provision makes it clear that these demat charges are for maintaining dematerialised form of assessee s investments made in securities at its customers behest. Learned Departmental Representative seeks to cover the same in the constituents category hereinabove. We find no merit in this plea since it is not a case of constituents demat charges collection. Hon ble apex court in (2001) 251 ITR 522 (SC) Mehsana District Co-operative Bank vs. ITO allows section 80P de ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
