2005 Supreme(SC) 1666

SUPREME COURT OF INDIA
Ruma Pal, C.K. Thakker, JJ.
Commnr of Income Tax, Jalandhar - Appellant
Versus
Nawanshahar Central Coop. Bank Ltd. - Respondent
Civil Appeal No. 2499 of 2005 (Arising out of SLP(C)No.3826 of 2004)
Decided On : 08-04-2005

Income arising from investments made by a banking concern is deductible under Section 80-P (2)(a)(i) of the Income Tax Act 1961 as it is considered part of the business of banking.

Headnote:

Income Tax Act 1961 - Banking Investments - Deductibility under Section 80-P (2)(a)(i)

Fact of the Case:

The court held that investments made by a banking concern are part of the business of banking and the income arising from such investments is deductible under Section 80-P (2)(a)(i) of the Income Tax Act 1961.

Finding of the Court:

The court analyzed previous cases and concluded that investments made by a banking concern are attributable to the business of banking and thus deductible under Section 80-P (2)(a)(i) of the Income Tax Act 1961.

Issues: Interpretation of the deductibility of income from banking investments under Section 80-P (2)(a)(i) of the Income Tax Act 1961.

Ratio Decidendi: The court relied on previous cases to establish that income arising from investments made by a banking concern is part of the business of banking and is deductible under Section 80-P (2)(a)(i) of the Income Tax Act 1961.

Final Decision: The appeals were dismissed without costs based on the principle that investments made by a banking concern are part of the business of banking and the income arising from such investments is deductible under Section 80-P (2)(a)(i) of the Income Tax Act 1961.