2005-VIL-14-SC-DT

Equivalent Citation: [2007] 289 ITR 6 (SC), 2007) 15 SCC 611

Supreme Court of India

155 & 154 of 2002 CIVIL APPEAL NOS. 2499 AND 2500 OF 2005

Date: 08.04.2005

COMMISSIONER OF INCOME TAX

Vs

NAWANSHAHAR CENTRAL CO-OPERATIVE BANK LTD.

For the Appellant : Mohan Parasaran, A. Harish Chandra, Anuvrat Sharma and B.V. Balram Das.
For the Respondent : Nidhesh Gupta, Vinod Shukla and Ms. Janani.

BENCH

MRS. RUMA PAL AND C.K. THAKKER, JJ.

JUDGMENT

  1. Delay condoned.

2. Leave granted.

3. This Court has consistently held that investments made by a banking concern are part of the business of banking. The   income arising from such investments would, therefore, be attributable to the business of bank falling under the head "Profits and Gains of business" and thus deductible under Sec.80-P (2)(a)(i) of the Income Tax Act 1961. This has been so held in    Bihar State Cooperative Bank Ltd. v. Commissioner of Income Tax [1960] 39 ITR 114 (SC), Commissioner of Income Tax, v. Karnataka State Cooperative Apex Bank [2001] Supp. (2) SCR 35, Commissioner of  Income Tax  v. Ramanathapuram District Cooperative Central Bank Ltd.[2002] 255 ITR 423 (SC).

4. The principle in these cases would also cover a situation where a cooperative bank carrying on the business of banking is statutorily required to place a part of its funds in approved securities. The appeals are accordingly dismissed without costs.

 

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