9911796707
TMI Blog1984 (3) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... elevant and have to be taken into consideration lie in a narrow compass as under. 2. The assessee is admittedly a co-operative society having the business of banking. In other words, it is a banking co-operative society and the income from this business of the assessee is exempt under section 80P(2)(a)(i) of the Income-tax Act, 1961 ('the Act'). During the previous year which ended on 30-6-1978, the assessee debited to its account a sum of Rs. 30,000 as provision for loss from bad and doubtful debts. When the assessment was taken up by the ITO, he added back this sum in computing the taxable total income of the assessee as the assessee had income from miscellaneous receipts shown in the profit and loss account at Rs. 711. The addition mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e contended that this is a case where the assessee has to prove that it is engaged in carrying on the business from which the income is exempt and since there are heads of income other than the income which is exempt, the disallowance made by the authorities below and added to the taxable income has full justification in view of the judgment of the Andhra Pradesh High Court in the case of Andhra Pradesh Co-operative Central Land Mortgage Bank Ltd. v. CIT [1975] 100 ITR 472. 6. After careful consideration of the rival submissions and on perusal of the authority cited on behalf of the revenue, I find no justification for what has been done by the authorities below. The reasons for this are basically factual and not far to seek. The ITO has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... connection and nexus with that business activity of the assessee which is exempt under section 80P(2)(a)(i). The whole process has been, it may be said, done inversely. 7. The reliance placed by the revenue on the judgment of the Andhra Pradesh High Court in Andhra Pradesh Co-operative Central Land Mortgage Bank Ltd.'s case is of no avail because there is no dispute by the ITO that the assessee is in fact carrying on the business of a banking co-operative society and has in fact exempt income which emanated from such an activity. It has also been shown that the debit of Rs. 30,000 could not be related to or against the income from other receipts, i.e., the heads from which the income is not exempt from tax. Therefore, factually there is n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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