1990 (4) TMI 119

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....earned income by way of commission from Maharashtra State Electricity Board (MSEB) and Mula Pravara Co-operative Society (MPCS) for collecting electricity bills from public on their behalf. This amount came to Rs. 1,81,700. After deducting proportionate expenses of Rs. 1,55,934 net income from this source came to Rs. 25,766. The assessee pleaded that income by way of commission from MSEB and MPCS was income derived from business of banking and as such said income was liable to be considered (along with other income from banking) for exemption from inclusion in the total income u/s. 80P(1) read with section 80P(2)(a)(i) of the Act. The ITO as well as CIT(A) has not accepted this submission. According to them, income by way of commission from....

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....ion and gets further commission at prescribed rate for rendering services of sending collection statement. These facts are not in dispute. The question is whether the commission earned in the above circumstances could be said to have been earned in the course of business of banking. 4. The learned departmental representative has relied on definition of 'banking' given in section 5(b) of the Banking Regulation Act, 1949. It is stated there that banking means the accepting for the purpose of landing or investment of deposits of money from the public, repayable on demand or otherwise and withdrawal by cheque, draft, order of otherwise. He has then referred to provisions of section 6 of the said Act in which forms of business in which a bank....

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....banking. In other words, what we have to see is whether the income is incidental to business activity of any company which carries on business of banking. The expression "attributable" is wider than the expression "derived from" and it covers. income from activities incidental to main activities as observed in CIT v. Co-operative Cane Development Union Ltd. [1979] 118 ITR 770 (All.). We have to look at the matter from this point of view. Considering the circumstances it must be held that income by way of commission in this case was "attributable" to business of banking carried on by assessee. That income was not an income attributable to an activity which was not an activity of business of banking. Consequently, said income was liable to be....