Tax Management India. Com
                        Law and Practice: A Digital eBook ...

Category of Documents

TMI - Tax Management India. Com
Case Laws Acts Notifications Circulars Classification Forms Manuals SMS News Articles
Highlights
D. Forum
What's New

Share:      

        Home        
 

TMI Blog

Home List
← Previous Next →

1957 (9) TMI 49

this case is the Surat Peoples' Co-operative Bank Ltd., which is registered under the Bombay Co-operative Societies Act, 1925. Among the objects of the bank is object No. 5 "to undertake every kind of banking and shroffi business" and the assessee in the relevant year of account ending 30th June, 1949, was carrying on banking business. During the course of its banking business, the assessee purchased Government securities in the year of account and a profit of ₹ 53,229 was earned by the assessee. The assessee claimed exemption from tax in respect of the said amount under an explanation to F.D. (C.R.) Notification R. Dis. No. 291-I.T /25, dated the 25th August, 1925, as amended by Notification No. 26 dated 25th June, 1927 .....

X X X X X X X

Full Text of the Document

X X X X X X X

present reference has been made. The question referred to us is: "Whether the profit amounting to ₹ 53,229 on the purchase and sale of Government securities is exempt from tax under the explanation to Notification R. Dis. No. 291-IT/25 dated 25th August, 1925, as amended subsequently, under section 60 of the Indian Income-tax Act?" Now, turning to the notification, it is clear that under sub-clause (2), the profits of any co-operative society registered under the Bombay Co-operative Societies Act are exempt from tax, and since the assessee is a society registered under that Act, all its profits are exempt from tax. But to this sub-clause, there is an explanation; and the relevant part of the explanation with which we are con .....

X X X X X X X

Full Text of the Document

X X X X X X X

tive society or its stock-in-trade. If they are dividends on shares which were its stock-in-trade, then having regard to the case, Commissioner of Income-tax v. Ahmuty and Co. [1955] 27 ITR 63, they would have been taxable as business income; while if they are dividends from shares, which are not its stock-in-trade, they would have been taxable under "other sources". That is why "dividends" form a separate head in the income, profits or gains which are excluded from the exemption, and are not included in head No. 3 which relates to the "other sources" referred to in section 12. Subsequent to the date of the notification, however, the Income-tax Act has been amended by including dividends in section 12 and a sep .....

X X X X X X X

Full Text of the Document

X X X X X X X

ense of an investment which is in the nature of a capital investment and which is not an investment in securities or property which is its stock-in-trade. If, there is investment in the popular sense in securities or property, which is its stock-in-trade, it is not investment in the sense in which that word is used in the notification; and what attracts tax is the income, profits or gains of investments, which are investments in the sense that the securities or property is not held as the stock-in-trade of the co-operative society. This view also helps to explain why the framers of the notification have not used the simple expression "interest on securities" in sub-clause (1), because if they did, the result would have been that i .....

X X X X X X X

Full Text of the Document

X X X X X X X

accepted meaning of the word "investment"; but their Lordships were not there concerned with the distinction which we have already pointed out between an investor in securities and a dealer in securities. The issue before their Lordships was that the bank had claimed that it had been dealingin shares and securities and their Lordships held that the dealings in securities were really part of the business of the bank. Therefore, in our opinion, the word "investment" in sub-clause (1) of the explanation relates only to such securities as do not form part of the stock-in-trade of the co-operative society; and as in the case before us they did form part of the stock-in-trade as it was a banking company, the income, profits o .....

X X X X X X X

Full Text of the Document

X X X X X X X

 

 

← Previous Next →

 

 

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || Database || Members || Refer Us ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.
|| Blog || Site Map - Recent || Site Map ||