| Case ID |
d81edb24-d6f7-4388-9ffb-071f06ffbd04 |
| Body |
View case body. Login to View |
| Case Number |
S.J. CS. Nos. 38 TO 42 OF 1974 |
| Decision Date |
Apr 05, 1976 |
| Hearing Date |
|
| Decision |
The Tribunal determined that the income derived by the co-operative society from interest on securities and fixed deposits constituted business income, thus qualifying for exemption under section 81 of the Income-tax Act, 1961. The Tribunal's finding was based on the premise that the income, while classified under different heads, still fell within the ambit of profits and gains of business. The court upheld this conclusion, stating that no direct evidence was provided by the revenue to contest the Tribunal's findings. Therefore, the co-operative society was entitled to relief under the law. |
| Summary |
In the landmark case of Commissioner of Income Tax v. Orissa State Co-operative Housing Corporation Ltd., the Orissa High Court examined the applicability of section 81 of the Income-tax Act, 1961 concerning the exemption of income derived by co-operative societies. The case revolved around the assessment years 1962-63 to 1966-67, where the co-operative society claimed that interest on fixed deposits and securities should be exempt from tax. Initially, the Income-tax Officer (ITO) dismissed the claim, asserting that such income did not qualify for exemption. However, the Appellate Assistant Commissioner concurred with the ITO's decision. The Tribunal reversed this ruling, stating that the income from interest on securities and fixed deposits was indeed part of the business income of the society. The Supreme Court's precedent in CIT v. Cocanada Radhaswami Bank Ltd. was pivotal, emphasizing that income from securities could be classified as business income if the securities were part of trading assets. The court ultimately agreed with the Tribunal's assessment, affirming that the income derived from interest on securities and fixed deposits was entitled to exemption under section 81 of the Income-tax Act, 1961. This decision underscored the importance of evaluating income classification based on commercial principles rather than rigid statutory definitions, promoting fairness in tax assessments for co-operative societies. |
| Court |
Orissa High Court
|
| Entities Involved |
Orissa State Co-operative Housing Corpn. Ltd.
|
| Judges |
R.N. Misra,
N.K. Das
|
| Lawyers |
R. Mohanty
|
| Petitioners |
Commissioner of Income Tax
|
| Respondents |
Orissa State Co-operative Housing Corpn. Ltd.
|
| Citations |
1976 SLD 469 = (1976) 104 ITR 157
|
| Other Citations |
CIT v. Cocanada Radhaswami Bank Ltd. [1966] 57 ITR 306 (SC)
|
| Laws Involved |
Income-tax Act, 1961
|
| Sections |
81
|