Madhya Pradesh H.C : Whether the Tribunal committed an error in law in treating the income of the assessee from interest on securities, commission, subsidy, donation and locker rent as exempt under s. 80P of the IT Act, 1961 ?

High Court Of Madhya Pradesh

CIT vs. Bhopal Co-Operative Central Bank Ltd.

Section 256(2), 80P

S.S. Sharma & K.L. Srivastava, JJ.

Misc. Civil Case No. 88 of 1986

24th November, 1986

S.S. SHARMA, J.:

This order shall also govern the disposal of Misc. Civil Cases Nos. 89 of 1986, 90 of 1986, 91 of 1986 and 92 of 1986.

2. This is a reference application under s. 256(2)of the IT Act, 1961 (hereinafter referred to as the Act).

3. The question sought to be referred is as under:

” Whether the Tribunal committed an error in law in treating the income of the assessee from interest on securities, commission, subsidy, donation and locker rent as exempt under s. 80P of the IT Act, 1961 ? “

4. The Tribunal, while rejecting the application of the Department under s. 256(1) of the Act had placed reliance on a decision of this Court in CIT vs. Dhar Central Co-operative Bank (1984) 149 ITR 438 (MP). With regard to the income from interest, reliance was placed on a decision of the Supreme Court in Bihar State Co-operative Bank Ltd. vs. CIT (1960) 39 ITR 114 (SC) With regard to the donation, the amount was only Rs. 5,000 in the asst. yr. 1971-72, which was treated as a gift and thus was not held to be income in the case of bank. It was also observed that it should otherwise have been excluded from the assessee’s income.

5. In the case of Dhar Central Co-operative Bank (1984) 149 ITR 438 (MP), the question which had been referred were as under: ” (i) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the income from commission and brokerage, subsidy from Government, admission fee, incidental charges, financial penalties and miscellaneous income is not exempted under the provisions of s. 80P(2)(a)(i) of the IT Act, 1961 ? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessment in this case for the asst. yr. 1974-75 was rightly reopened under s. 147(b) of the IT Act, 1961 ? ” and they were answered in the negative and against the Department. In the case of Bihar State Co-operative Bank Ltd. (supra) their Lordships had found that the ” High Court was in error in treating interest derived from deposits as not arising from the business of the bank and, therefore, not falling within the income exempted under the notification.” The appeal was thus allowed and the order of the High Court was set aside.

In view of these decisions and s. 80P of the IT Act, no question of law arises as `has been’ contended by learned Counsel for the Department for which a direction may be required to be given to the Tribunal for stating the case. In our opinion, even with regard to the donation amount, no question of law arises.

These applications are, therefore; dismissed summarily.

[Citation : 172 ITR 423]

Malcare WordPress Security