Alfred Henry Lionel Leach, C.J.

1. The assessee is a co-operative central bank registered under the Indian Co-operative Societies Act of 1912. This statute has been replaced, so far as this Presidency is concerned, by the Madras Co-operative Societies Act (VI of 1932), but nothing turns on this. The assessee corporation consists of 671 shareholders. Of the shareholders 138 are persons and 533 co-operative societies. For the year of assessment 1937-38 the Income Tax authorities have held that the assessee had a total income of Rs. 37,445 made up as follows : - Rs. 5,293, interest on taxed securities; Rs. 1,519, interest on tax free securities; Rs. 4,009, interest obtained on deposits and Rs. 26,624, profits made on its transactions. The assessee does hot confine its business to its shareholders but carries on an ordinary banking business as well. By virtue of a notification of the Government of India under Section 60 of the Indian Income Tax Act of 1922 the "profits" of a co-operative society are exempt from Income Tax, but the notification stipulates that the profits shall be taken into account in determining the total income for the purposes of the Indian Income Tax Act. Af