9911796707
TMI Blog1972 (9) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... ts. It came to be assessed under the Income-tax Act of 1961 (hereinafter referred to as " the Act "), for the assessment years 1962-63, 1963-64, 1965-66 and 1966-67. The Income-tax Officer took up all the assessments at a time and by order dated January 27, 1967, made in respect of each of the assessment years directed interest accrued due on the securities held by the petitioner to be added to the income for the purposes of taxation. The petitioner did not pursue the remedy of appeal available under section 246 of the Act, bat filed a revision petition against each of the four assessments under section 264(1) of the Act before the Commissioner of Income-tax, Orissa. Those revision petitions came up for disposal before the Additional Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lities to its members. The Additional Commissioner formulated the right basis of law, namely : " It is clear that business income in the case of a co-operative, society engaged in banking business is totally exempted from tax." The petitioner does not claim exemption on the basis of providing credit facilities to its members, but claims that since it carries on business of banking and interest in the instant case on Government securities is profit attributable to the said activity of banking, such profit is to be exempted in toto in computing the income of the petitioner. The question for examination, therefore, is as to whether interest on Government securities constitutes business -income arising out of, and appertaining to, banking b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we have already indicated, the petitioner does not claim exemption on the ground that the profits were earned while carrying on the activity of providing credit facilities to its members. If that was the case, positive evidence in support of such claim had to be produced as from the accounts maintained by the petitioner evidence of such fact could be available. The petitioner, however, has taken the stand that the investment in Government securities is not a capital investment, but is one integrally connected with its business of banking and those investments have been made to facilitate or ensure the carrying on of its business of banking smoothly. To meet such a case there may or may not be evidence in the accounts, the intention would b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s: One of the purposes of such activity is to ensure availability of ready money to meet various exigencies of the banking trade. In such circumstances holding of Government securities would indeed be appropriately connected with the banking business and thus the matter would be covered by the first part of the provision contained in section 80P(2)(a)(i) of the Act. The conclusion reached by the Additional Commissioner does not seem to be correct. Learned standing counsel vehemently contended that it is not a fit case where we should assume jurisdiction for issuing a writ of certiorari. In support of his contention, he placed reliance on the decisions in Veerappa Pillai v. Raman and Raman Ltd., Nagendra Nath Bora v. Commissioner of Hills ..... X X X X Extracts X X X X X X X X Extracts X X X X
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