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TMI Blog1942 (9) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... nvolves the construction of Section 8 of the Indian Income-tax Act, 1922, as amended in 1939. The first clause of the section states that the tax shall be payable by an assessee under the head interest on securities in respect of the interest receivable by him on any security of the Central Government or of a Provincial Government, or on debentures or other securities for money issued by or on b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve Bank, Limited, a society registered under the Co-operative Societies Act, 1912, and the Madras Co-operative Societies Act, 1932. In the year of account, 1938-39, the assessee received in interest on tax-free securities the sum of ₹ 69,975. By reason of the second proviso to Section 8 the assessee is entitled to deduct this sum when calculating the amount of income on which income-tax is p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our opinion, the assessee here is entitled to the benefit of the first proviso in respect of interest received from securities which are not tax-free and to the benefit of the second proviso in respect of tax-free securities. The assessee is not entitled to a double exemption in respect of the tax-free securities. The question will be answered in this sense. The second question must also be ans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Registrar, under Section 32 of the Madras Co-operative Societies Act, 1932. There was no sanction asked for or given here and therefore there was no loan to the Madras Co-operative Central Land Mortgage Bank within the meaning of the by-laws. But apart from this, the fact that the assessee went into the market to purchase these securities shows that the object was investment. The interest p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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