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TMI Blog1961 (8) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... ts banking business. For the assessment years 1945-46 and 1946-47, the income from the two sources was cumulatively considered under the head business both by the assessee and by the department. In 1947-48 and 1948-49, the assessee continued to show all his income from all sources under the head business . But the department proceeded to make the assessment determining the income under two separate appropriate heads, namely, (i) interest on securities under section 8 and (ii) income from the head business under section 10 of the Act. Accordingly, for the assessment year, 1949-50, the assessment was made as follows : Rs.A. P. Interest on securities 8,488-0-0 Business loss 64,400-0-0 Net loss ... 55,912-0-0 In the three succeeding years, the department accordingly showed the income under the two separate heads and allowed set-off only regarding the income which the department classified under the head interest on securities , that is, interest received from its investment in Government securities. The depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat case, three questions were referred by the Tribunal to the Calcutta High Court. Of them, we are concerned only with the first question which ran as follows: Whether, on the facts and in the circumstances of this case, the assessee was entitled to set off the business loss of ₹ 3,21,929 brought forward from the preceding year against this year's income including interest on securities held by the assessee. Their Lordships of the Calcutta High Court answered that question in the negative. It may be observed that the question so decided by the Calcutta High Court was substantially the same as the question which has been referred to us in the present case. The above decision of the Calcutta High Court was taken up on appeal to the Supreme Court. The latter pronounced judgment on May 23, 1957, which was after the Tribunal made the reference to us in this case (It was of date February 28, 1957). In that decision, United Commercial Bank Ltd. v. Commissioner of Income-tax [1957] 32 ITR 688 ; [1958] SCR 79, their Lordships of the Supreme Court observed as follows : Counsel for the assessee on the other hand submits that the use of the word 'same' signifies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y follow the decision and example of the Supreme Court and remit the case to the Income-tax Appellate Tribunal, Hyderabad Bench, for giving a fuller statement of facts about this part of the case: Whether the securities in question were a part of the trading assets held by the assessee in the course of its business as a banker and whether its dealing with the securities (from which it received interest) was as much the assessee's business as receiving deposits from clients and withdrawals by them ? The learned advocate for the petitioner contends that as per the amendments which have been made to section 24(2) in 1955 (after the reference was made) and in 1957, the assessee would be entitled to set off the loss of ₹ 55,912 not only against the profits of banking business but also against profits from interest on securities. But this is a point which has not been referred to us by the Tribunal under section 66(1) of the Income-tax Act and we cannot go into such question now. It is open to the assessee to press this contention also before the Tribunal when the matter goes before it. There shall be no order as to costs. In pursuance of the aforesaid order, the Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... easily be converted into cash as and when required and at the same time there was the advantage of some income to the assessee by way of interest on the said securities, which it could earn till the securities in question were sold for the said necessities. In this connection, our attention was also drawn to the annual report of the working of the assessee bank by way of example. For instance, the eighth annual report on the working of the assessee bank for the period ended 31st December, 1950, is as follows. In the second paragraph it is stated : The paid up capital of the bank is ₹ 1,00,400. The working capital at the end of the year was ₹ 9,08,408 which was utilised as shown below: Rs. (1)Money at call and short notice 59,138 (2)Fully secured loans 95,965 (3)Loans secured by personal security 20,647 (4)Loans secured by personal security as well as personal liability of one or more parties 1,38,379 (5)Government securities at cost 4,62,662 (6)Cash in hand an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of law raised by the High Court and on which it called for a statement of the case from the Tribunal under section 66(2) and since at this stage the Tribunal cannot refer any question otherwise than submitting a statement of case to the High Court on the question which was stated to arise out of the Tribunal's order on the application of the assessee filed under section 66(2), the assessee was not in a position to point out as to how any question could be considered in regard to the contention mentioned above and hence we leave the matter there. ANNEXURE A The Cocanada Radhaswami Bank Ltd., Kakinada. Eighth annual report on the working of the Cocanada Radhaswami Bank Limited, Kakinada, for the period ended 31st December, 1960: 1.The directors beg to submit their eighth annual report for the year ended 31st December, 1950, together with the profit and loss account and the balance-sheet. 2.The paid-up capital of the bank is ₹ 1,00,400. The working capital at the end of the year was ₹ 9,08,408 which was utilised as shown below: Rs. (1)Money at call and short notice 59,138 (2)Fully secured loans ..... X X X X Extracts X X X X X X X X Extracts X X X X
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