COCANADA RADHASWAMI BANK LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference by the Tribunal, Hyderabad Bench, in compliance with the requisition of the High Court of Andhra in Civil Miscellaneous Petitions Nos. 122, 123 and 124 of 1955, dated August 5, 1955. The question of law referred to this Court is as follows : "Whether, on the facts and in the circumstances of the case, the assessee was entitled to set off the business loss of Rs. 55,912 brought forward from the preceding year against the entire income including interest on securities held by the assessee -

(2.) THE relevant facts of the case are briefly as follows :

(3.) THE contention on behalf of the assessee is that the interest on securities was also income derived from its banking business and that banking and dealing in securities constituted one and the same business. But it is admitted on behalf of the assessee that the chargeability section regarding the interest on securities is S. 8 and regarding the other income derived from the banking business concerned in this case (that is, income shown by the Department under the head "business") is S. 10. The difference between the department and the assessee was on the question whether the income under the head "interest on securities", though chargeable under S. 8, was also part of the income from business of the bank for the purpose of setting off the loss of Rs. 55,912. The contention of the assessee was that the amount against which loss of Rs. 55,912 could be set off was the amount shown in column 4 above, whereas the Department allowed set -off only against the figures shown in column 3 in the tabulation given above in this judgment.