Commissioner of Income-tax, Kolkata-XVIII v. Contain Cooperative Bank Limited
[Citation -2015-LL-0602-47]

Citation 2015-LL-0602-47
Appellant Name Commissioner of Income-tax, Kolkata-XVIII
Respondent Name Contain Cooperative Bank Limited
Court HIGH COURT OF CALCUTTA
Relevant Act Income-tax
Date of Order 02/06/2015
Assessment Year 2006-07
Judgment View Judgment
Keyword Tags state co-operative bank • banking regulation act • banking company • interest earned
Bot Summary: Mr.Bharadwaj, learned Advocate, appearing for the assessee submitted that the assessee is a primary cooperative bank and is engaged in the business of banking. He relied upon Clause of Section 5 of The Banking Regulation Act, 1949 in order to show the definition of the expression banking which provides as follows: 3 banking means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, order or otherwise. He also drew our attention to section 56(c) of the Banking Regulation Act, 1949 by which Clause has been added to Section 5 of the Banking Regulation Act, 1949 which reads as follows; Co-operative Bank means a State Co-operative Bank, a Central Co-operative Bank and a primary Co-operative Bank. Mr. Bharadwaj, contended that the assessee is a primary cooperative bank and is engaged in the business of the banking which includes investments. He has not disputed the fact 4 that the assesse is a primary cooperative bank. His sole contention is that such a question was raised before the Supreme Court in the Case of Mehsana District Central Co- operative Bank Ltd. Vs. ITO reported in 251 ITR 522 and Their Lordships remanded the matter for further enquiry into the facts. As at presently advised, we are of the opinion that the deposit of non- statutory fund made by the assessee amounts to an investment which is one of the activities of a banking company contemplated under Section 5(b) of the Banking Regulation Act, 1949 quoted above.


ORDER SHEET ITA NO.100 OF 2011 IN HIGH COURT AT CALCUTTA Special Jurisdiction(Income Tax) ORIGINAL SIDE COMMISSIONER OF INCOME TAX, KOLKATA-XVIII Versus CONTAIN COOPERATIVE BANK LIMITED BEFORE: Hon'ble JUSTICE GIRISH CHANDRA GUPTA Hon'ble JUSTICE ARINDAM SINHA Date : 2nd June, 2015. MR.P.K.BHOWMIK, MR.SOUMITRA MUKHERJEE,ADVOCATES FOR APPELLANT MR.R.BHARADWAJ,ADVOCATE FOR RESPONDENT Court : judgment under challenge by revenue is dated 13th November, 2009 passed by learned Income Tax Appellate Tribunal pertaining to assessment year 2006-2007. Assessing Officer without spending word, in computation made by him in his order under Section 143(3) of IT Act, deducted 2 interest earned by assessee from non-statutory funds. aforesaid deduction was made because Assessing Officer was not inclined to give benefit under Section 80P(2)(a)(i). Naturally deduction made by him was taxed in ordinary manner. Being aggrieved assessee preferred appeal. C.I.T.(A) following earlier judgment of Tribunal allowed contention of assessee and reversed order of Assessing Officer. In appeal preferred by revenue, learned Tribunal upheld order of C.I.T.(A) following its earlier judgment. It appears that none of three authorities discussed issue. Mr.Bhowmik, learned Advocate, appearing for revenue submitted that business income of assessee is amenable to benefit under Section 80P(2)(a)(i) but income earned from interest from non-statutory funds was not amenable to identical benefit under aforesaid section. Mr.Bharadwaj, learned Advocate, appearing for assessee submitted that assessee is primary cooperative bank and is engaged in business of banking. He relied upon Clause (b) of Section 5 of Banking Regulation Act, 1949 in order to show definition of expression banking which provides as follows: 3 (b) banking means accepting, for purpose of lending or investment, of deposits of money from public, repayable on demand or otherwise, and withdrawable by cheque, draft, order or otherwise. He also drew our attention to section 56(c) of Banking Regulation Act, 1949 by which Clause (cci) has been added to Section 5 of Banking Regulation Act, 1949 which reads as follows; (cci) Co-operative Bank means State Co-operative Bank, Central Co-operative Bank and primary Co-operative Bank. Mr. Bharadwaj, contended that assessee is primary cooperative bank and is engaged in business of banking which includes investments. question for consideration before us is whether voluntary investment made by assessee and interest earned from such investment is amenable for benefit under Section 80P(2)(a)(i). He contended that there is no reason why separate treatment has to be given. Mr.Bhowmik is unable to refute any of submissions advanced by Mr.Bharadwaj. He has not disputed fact 4 that assesse is primary cooperative bank. He has also not disputed fact that assessee is engaged in banking business. He has also not disputed fact that non-statutory fund invested by assessee is within activity of banking business and amounts to investment. His sole contention is that such question was raised before Supreme Court in Case of Mehsana District Central Co- operative Bank Ltd. Vs. ITO reported in 251 ITR 522 and Their Lordships remanded matter for further enquiry into facts. aforesaid course might have been required in that case. Mr. Bhowmik did not dispute that any further factual enquiry is not required in this case. If any further factual enquiry is not required then question of remanding this matter would not arise. question for consideration is whether income arising out of interest from non-statutory funds is business income. As at presently advised, we are of opinion that deposit of non- statutory fund made by assessee amounts to investment which is one of activities of banking company contemplated under Section 5(b) of Banking Regulation Act, 1949 quoted above. We find therefore, no reason why income should not be treated as business income. It was not disputed by 5 Mr.Bhowmik that if it is business income then it is amenable to benefit under Section 80P(2)(a)(i). For aforesaid reasons, we find no merit in this appeal and is dismissed. (GIRISH CHANDRA GUPTA, J.) (ARINDAM SINHA, J.) sb. Commissioner of Income-tax, Kolkata-XVIII v. Contain Cooperative Bank Limited
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