PUNJAB CO-OPERATIVE BANK LTD Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) 1.This is an appeal from a judgment of the High Court of Judicature at Lahore, dated February 3, 1938, delivered on a reference under Section 66(2) of the Indian Income-tax Act (XI of 1922) by the Commissioner of Income-tax, Punjab, North-West Frontier and Delhi Provinces.

(2.) THE appellant (hereinafter referred to as the bank) is a joint stock company, incorporated in the year 1905, carrying on the business of banking. THE objects for which the bank was established are set out in paragraph 3 of its Memorandum of Association and include (A) To carry on in India and elsewhere the trade or business of banking in all its branches, and to transact and da all matters and things incidental thereto, or which may at any time hereafter be usual in connection with the business of banking) on dealing in money or securities for money. Paragraph 82 (i) of the articles of association provides that the directors- may invest funds of the Company upon such securities or investments as they may think advisable; from time to time, vary such securities and investments, and convert the same, as occasion may require or as they may deem expedient, but they shall not invest or employ any part of the funds of the company in the purchase of its own shares.

(3.) ON June 17, 1938, the High Court certified under Section 66A of the Indian Income-tax Act on the petition of the bank that the case was a fit case for appeal to His Majesty in Council. As it happened the two learned Judges who gave this certificate were those who heard and decided the case on February 3, 1938.