1987 (6) TMI 25

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....n the facts and in the circumstances of the case, the Tribunal is correct in law in holding that the income from commission, etc., at Rs. 38,722 and from locker rent at Rs. 5,681 earned by the assessee are not from carrying on the business of banking and, therefore, not entitled to exemption under section 80P(2)(a)(i) of the Income-tax Act, 1961 ? (2) Whether, on the facts and in the circumstances of the case, the subsidy received by the assessee at Rs. 5,000 and credited in the books of account under the head 'Donation and Financial assistance' for meeting part of the expenditure of a new branch was not a receipt in the course of carrying on the business of banking and was, therefore, liable to be taxed as income and being not entitled ....

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....on ad hoc basis and such receipts were credited in the account styled as " Subsidy and donations ". We have heard learned counsel for the parties. It has been urged by learned counsel for the assessee that the entire income which is the subject-matter of the two questions referred to this court falls within the ambit of section 80P(2)(a)(i) of the Income-tax Act, 1961 (hereinafter referred to as " the Act "), which is quoted hereunder: " 80P. (1) Where, in the case of an assessee being a co-operative society, the gross total income includes any income referred to in subsection (2), there shall be deducted in accordance with and subject to the provisions of this section, the sums specified in sub- section (2), in computing the total in....

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....all under clause (a) of section 80P(2) nor did it fall under clause (b) and consequently it was a case to which clause (c) thereof was attracted and the assessee was entitled to the deduction contemplated by the said clause (c). In view of the aforesaid two decisions, we are of opinion that the income which is the subject-matter of the two questions referred to us except income from locker rent is attributable to the business of banking or providing credit facilities to its members and hence liable to exemption under section 80P(2)(a)(i) of the Income-tax Act, 1961. Even while conceding wider import to the expression " attributable to " than the expression " derived from ", it is now to be found as to whether the income derived from locker ....