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TMI Blog2002 (12) TMI 220X X X X Extracts X X X X X X X X Extracts X X X X ..... activities do not form part of banking activity of the assessee bank. The learned CIT(A) further erred in not allowing the deduction under s. 80P of the IT Act, 1961 in respect of miscellaneous income." 2. The assessee is a bank, which accounted for miscellaneous receipts of Rs. 4,13,726 the break-up of which is as under: Sale of shares forms 10,553 Sale of loan application forms 3,66,860 Old record pulping charges 3,255 Demand draft payable written back 33,058 3. The AO held that the foregoing receipts did not arise on account of banking activity performed by the assessee. Therefore, the same is not eligible for deduction under s. 80P(2)(a)(i). The assessee took up the matter in appeal before the learned CIT(A). 4. Before the le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f application forms and loan application forms may be a part of the business of the co-operative bank but the same is not part of the banking activity. Similarly, pulp charges also cannot be a part of banking activity. Likewise, amount written back out of demand drafts not presented for payment also is not income of the banking activity. I rely upon the decision of the Gujarat High Court in Gujarat State Co-operative Bank Ltd. in support of my decision that the receipts of Rs. 4,13,726 accounted for by the assessee do not constitute income from the banking activity. The alternative ground of the appellant that the AO omitted to consider expenditure incurred for earning the receipts of Rs. 4,13,726 is accepted. The AO is directed to call for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e deduction under s. 80P of the Act. As far as sale of share forms is concerned, the assessee charges Rs. 10. It was submitted that the Co-op. Banks are prohibited from lending to non-members. It was submitted that the sale of forms is attributable to banking business. 12. Similarly, assessee charges Rs. 50 for per loan application form which contains the information such as, name, address and photograph of the borrower, amount of loan requested, purpose of loan and security for the said loan, name, address and consent of the guarantor, declaration required under s. 45 of the Maharashtra Co-op. Societies Act, 1960 that the borrower will borrow only from the assessee-bank. It was therefore, submitted that income from such sale of forms is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the impugned order. It was further submitted that by no means these items of income can be said to be relatable to regular banking activities and receipts will not be income from banking business, as these are different and distinct. So the AO is very much justified in making the disallowance and the learned CIT(A) has rightly confirmed such action of the AO. It was thus pleaded for further confirmation of the impugned order. 17. In order to counter the submissions of the learned Departmental Representative, the learned counsel for the assessee submitted that loaning is a pre-requisite of the main banking activities and as per relevant provision these items of income if not taken to be derived from banking business, these are necessarily ..... X X X X Extracts X X X X X X X X Extracts X X X X
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