TMI Blog1967 (11) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... d by J. C. SHAH J.-- The respondent, a co-operative society registered under the Bombay Co-operative Societies Act, 1925, carries on the business of banking and for that purpose holds Government securities as its stock-in-trade. In proceedings for assessment to income-tax for the years 1953-54 and 1954-55 the Income-tax Appellate Tribunal declared that the interest received from the Government securities held by the society as its stock-intrade qualified for exemption under Notification No. F.D. (C.R.) R.Dis. No. 291-I.T/25 dated August 25, 1925, issued under section 60 of the Income-tax Act, and the High Court.of Bombay agreed with that view in a reference under section 66(1) of the Income-tax Act. The Commissioner has appealed against ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome, profits or gains from-- 1. Investments in-- (a) securities of the nature referred to in section 8 of the the Indian Income-tax Act, or (b) property of the nature referred to in section 9 of that Act, 2. Dividends, or 3. The ' other sources ' referred to in section 12 of the Income-tax Act. " The High Court held--and in our judgment the High Court was right in so holdidg--that the exemption under the notification applied to interest earned by a co-operative society from Government securities held by it as its stock-in-trade : it was inapplicable only to interest received from Government securities held by the society as investments. By the plain terms of the notification, exemption was granted in respect of " the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was clearly intended by the Explanation that in giving the benefit of the exemption, income received by a co-operative society from investments in securities of the nature referred to in section 8 will not be excluded, but securities held as stock-in-trade of the busine3s and not as investments will be admissible to the benefit of the exemption. If all income of a Co-operative society from securities was intended to be excluded from the benefit of the exemption, the expression " investments in " in the Explanation was wholly unnecessary. In Surat Peoples' Co-operative Bank Ltd. v. Commissioner of Income-tax the Bombay High Court held that the word " investment " in the Explanation to the notification related only to such securities as d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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