2010 (2) TMI 54

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....tax case appeal questioning the order of the Income Tax Appellate Tribunal, Madras 'C' Bench made in ITA No.1318/Mds/2008 dated 27.3.2009. The respondent is M/s Kamalambika Co-operative Urban Bank Limited. The primary business of the assessee is banking. For the assessment year 2004-2005, the assessee filed its return of income admitting an income of Rs.26,14,953/- and claimed exemption under Section 80-P of the Income Tax At. The assessee relied upon Section 80-P(2)(a)(i) for deduction in respect of income derived from purely banking activities. Holding that the assessee is engaged in the activity of purchasing and selling securities which does not partake the character of banking activities, the assessing officer did not allow the deducti....

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....ents in Bihar State Co-operative Bank Ltd. v. CIT (1960) 39 ITR 114, CIT v. Karnataka State Co-operative Apex Bank, (2001) 251 ITR 194 and CIT v. Ramanathapuram District Co-operative Central Bank Ltd., (2002) 255 ITR 423. The contention of the learned counsel for the respondent-assessee is that in view of the above judgments of the Supreme Court, the issue is covered in favour of the assessee and therefore the appeal of the revenue should be dismissed. 4. However, Mr.J.Narayanaswamy, learned counsel for the revenue would submit that on the facts of the present case, the judgments of the Supreme Court referred to above cannot be made applicable. According to the learned counsel, in order to satisfy the provisions of Section 80-P(2)(a)(i), i....

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....deduction only upto ten percent as per the norms of the Reserve Bank of India is concerned, we may point out that from the judgments of the Supreme Court, we are not able to find out any such distinction being made with reference to the limit as per the norms. Even assuming that the assessee should maintain the basic norm of holding only upto ten percent and not above and in case the amount exceeds ten percent, the assessee is not entitled to deduction under Section 80-P(2)(a)(i), this point has not at all been considered by the assessing officer, as it was not a ground on which the claim of deduction under the said section was rejected. Even while the appeal was heard by the Commissioner of Income Tax (Appeals), this was not at all put as ....