TaxTMI 
TaxTMI 
2011 (1) TMI 1184
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....sallowed the claim for the reason that appellant being a Scheduled Bank does not fall within the meaning of "financial corporation" referred to in section 36(1)(viii) of the Act. In the appeal filed against assessment, the CIT(Appeals) agreed with the assessee, declared the assessee as a "financial corporation" and allowed the deduction claimed. However, on appeal by the Revenue, the Income Tax Appellate Tribunal reversed the order of the CIT (Appeals) and held that assessee being a Scheduled Bank is not entitled to be treated as a "financial corporation" within the meaning of that term contained in section 36(1)(viii) of the Act and so much so, it is not entitled to deduction claimed under the said section. It is against this order of the ....
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....rtainly the assessee would not be entitled to the benefit of deduction for the year 2004-2005. For easy reference we extract hereunder section 36(1)(viii) as it stood at the relevant time: "S.36. Other deductions:-(1) The deductions provided for in the following clauses shall be allowed in respect of the matters dealt with therein, in computing the income referred to in section 28- ..................... (viii) in respect of any special reserve created and maintained by a financial corporation which is engaged in providing long-term finance for industrial or agricultural development or development of infrastructure facility in India or by a public company formed and registered in India with the main object of ca....
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.... 36(1)(viii) underwent a sea change and it is only after the amendment various financial institutions like Banking Companies, Co-operative Banks etc. were brought within the meaning of specified entity defined under the said provision. The contention of the Revenue is that unless the assessee answers the description of "financial corporation" as defined under the provisions of the Act as it stood during the relevant assessment year, assessee is not entitled to the deduction claimed. 3. After hearing both sides and after going through the orders of the Tribunal, we feel the conclusion drawn by the Tribunal that assessee is not a financial corporation falling under section 36(1)(viii) of the Act during the relevant year is perfectly....
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....any and in turn financial corporation within the meaning of section 36(1)(viii) is accepted, then there was no need for the amendment introduced in 2007 referred to above whereunder banking companies are also specifically granted deduction under section 36(1)(viii) of the Act. As already pointed out by us, the Legislature made specific provisions in section 36(1)(viia) for Scheduled Banks and made certain provision for deduction exclusively for financial corporations under section 36(1)(viii). Even though Scheduled Banks and financial corporations engaged in business of analogous character, the Banking Companies are not generally referred as financial corporations. Normally financial corporations are either statutory corporations created un....