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PETITIONER: THE BIHAR STATE CO-OPERATIVEBANK LTD.
Vs.
RESPONDENT: THE COMMISSIONER OF INCOME-TAX
DATE OF JUDGMENT: 22/02/1960
BENCH: KAPUR, J.L. BENCH: KAPUR, J.L. SARKAR, A.K. HIDAYATULLAH, M.
CITATION: 1960 AIR 789 1960 SCR (3) 58
ACT: Income Tax-Co-operative Bank-Interest received on deposits with other banks-Exemption from taxation under Notification- Indian Income-tax Act, 1922 (XI Of 1922) SS. 10, 12.
HEADNOTE: The Appellant Bank which was registered under the Co- operative Societies ’Act, 1922, received, in the relevant account years, by way of interest on deposits with the Imperial Bank of India certain sums of money. The Income- tax Officer assessed the aforesaid sums under s. 12 of the Indian Income-tax Act 1922, as income from other sources, but the appellant claimed that the deposits were made not with the idea of making investments but for the purpose of carrying on its business as a bank and that as the interest received on the deposits was profit attributable to its business activities it was not subject to incometax because of the Notification issued by the Central Government under s. 6o of the Act. Under the Notification profits of any Co- operative Society are exempt from the tax payable under the Act but not income derived from "other sources" referred to in S. 12 of the Act. Held, that the interest fro...