Debenture interest from a co-operative land mortgage bank is taxable as income from other sources, not as interest on securities.

Interest on debentures issued by a co-operative land mortgage bank was held not to fall within "interest on securities" under the Income-tax Act because the issuing entity was not a bank established by a Central, State or Provincial Act. The earlier decision in the assessee's own case governed the reference, and once the receipt failed to qualify as interest on securities, it was assessable under the residuary head of "income from other sources". The question was answered in the negative and in favour of the Revenue.

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Issues: Whether interest on debentures issued by a co-operative land mortgage bank was assessable as "interest on securities" under section 18(1)(ii) of the Income-tax Act, 1961, or as "income from other sources".

Analysis: The interest on debentures had already been held in the assessee's own case to fall outside the ambit of "interest on securities" because the issuing co-operative land mortgage bank was not a bank established by a Central, State or Provincial Act. That earlier decision governed the present reference, and once the receipt did not qualify as interest on securities, it could only be brought under the residuary head.

Conclusion: The interest on the debentures was not assessable as "interest on securities" and was liable to be assessed under "income from other sources". The question was answered in the negative and in favour of the Revenue.

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