Banking business income attribution covers ancillary bill-collection services, making co-operative bank commission eligible for section 80P deduction.

Commission income earned by a co-operative bank for collecting electricity bills and providing allied collection services was treated as attributable to its banking business. The reasoning was that the collection work was integrally connected with banking operations, including receiving payments, issuing receipts, crediting amounts, maintaining records, and remitting funds. The phrase "attributable to" was read more broadly than "derived from", covering income from activities incidental to the main business. On that basis, income from such ancillary collection services qualified for deduction under section 80P(1) read with section 80P(2)(a)(i).

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Issues: Whether commission income earned by a co-operative bank for collecting electricity bills and rendering allied collection services was income attributable to the business of banking and therefore eligible for deduction under section 80P(1) read with section 80P(2)(a)(i) of the Income-tax Act, 1961.

Analysis: The commission arose from activities integrally connected with the banking operations of receiving payments, issuing receipts, crediting the amounts, maintaining collection records, remitting funds, and providing collection-related services. The expression "attributable to" was treated as wider than "derived from" and as covering income from activities incidental to the main banking business. The definition of banking under section 5(b) of the Banking Regulation Act, 1949 was not treated as limiting deduction only to deposits and withdrawals, and the additional activities contemplated by section 6(1) of that Act were regarded as capable of forming part of banking business for the purpose of the exemption. A liberal interpretation consistent with the object of encouraging co-operative societies was applied.

Conclusion: The commission income was held to be attributable to the assessee's banking business and deduction under section 80P(1) read with section 80P(2)(a)(i) was allowable to the assessee.

Ratio Decidendi: For purposes of section 80P, income arising from activities incidental to or integrally connected with the banking business is income "attributable to" that business and qualifies for the deduction.

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