CIT v. Nawanshahar Central Cooperative Bank Ltd.

15 SCC 611Reported decision2007#6253 most cited

What is CIT v. Nawanshahar Central Cooperative Bank Ltd. authority for?

Income earned by a banking concern from investments made as part of its banking business is taxable under the head 'Profits and Gains of Business'. Investments not made to maintain the Statutory Liquidity Ratio (SLR) are considered stock-in-trade, not mere investments.

18

judgments rely on this decision, according to BharatTax’s citation analysis of 366,339 Indian tax judgments — from 2020 to 2024.

Also referred to as

CIT v. Nawanshahar Central Cooperative Bank Ltd. · stock-in-trade · banking business · statutory liquidity ratio · SLR · profits and gains of business · investments by banks

Judgments citing CIT v. Nawanshahar Central Cooperative Bank Ltd.

The Bank of Rajasthan Ltd vs. Commissioner of Income Tax

Appeals are dismissed

C.A. No.-003291-003294 - 2009Supreme Court16 Oct 2024

Bench: HON'BLE MR. JUSTICE ABHAY S. OKA

Section 18Section 19Section 20Section 21

…2024 INSC 781 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NOS. 3291­3294 OF 2009 Bank of Rajasthan Ltd. … Appellant versus Commissioner of Income Tax … Respondent with Civil Appeal Nos.11200­11201 of 2024 (Arising out of S.L.P. (C) Nos. 1445­1446 of 2021) Civil Appeal No.11202 of 2024 (Arising out of S.L.P. (C) No. 4843 of 2020) Civil Appeal No.11203 of 2024 (Arising out of S.L.P. (C) No. 7055 of 2021) Civil Appeal No.11204 of 2024 (Arising out of S.L.P. (C) No. 7404 of 2021) Civil Appeal No.11205 of 2024 (Arising out o…

Pr. Commissioner of Income Tax-7 vs. Oriental Bank of Commerce Ltd (Now Merged With Punjab National Bank Ltd.)

ITA/522/2023HC Delhi13 Sept 2023

Bench: HON'BLE MR. JUSTICE RAJIV SHAKDHER,HON'BLE MR. JUSTICE GIRISH KATHPALIA

Section 14ASection 36(1)(vii)

…tutory Liquidity Ratio (SLR) are its stock-in- trade and not investments and income arising out of those is attributable, to business of banking. This Circular came to be issued in the aftermath of CIT Vs. Nawanshahar Central Cooperative Bank Ltd. [(2007) 15 SCC 611] / [(2007) 160 TAXMAN 48 (SC) ] wherein this Court had held that investments made by a banking concern is part of their banking business. Hence the income earned through such investments would fall under the head Profits & Gains of business. ….” [Also see PCIT v. State Bank of Patiala, 2017 (393) ITR 476 (P&H)] 6. In our opinion, the Trib…

Pr. Commissioner of Income Tax-7 vs. Oriental Bank of Commerce Ltd (Now Merged With Punjab National Bank Ltd.)

ITA/521/2023HC Delhi13 Sept 2023

Bench: HON'BLE MR. JUSTICE RAJIV SHAKDHER,HON'BLE MR. JUSTICE GIRISH KATHPALIA

Section 14ASection 36(1)(vii)

…tutory Liquidity Ratio (SLR) are its stock-in- trade and not investments and income arising out of those is attributable, to business of banking. This Circular came to be issued in the aftermath of CIT Vs. Nawanshahar Central Cooperative Bank Ltd. [(2007) 15 SCC 611] / [(2007) 160 TAXMAN 48 (SC) ] wherein this Court had held that investments made by a banking concern is part of their banking business. Hence the income earned through such investments would fall under the head Profits & Gains of business. ….” [Also see PCIT v. State Bank of Patiala, 2017 (393) ITR 476 (P&H)] 6. In our opinion, the Trib…

Pr. Commissioner of Income Tax-7 vs. Oriental Bank of Commerce Ltd (Now Merged With Punjab National Bank Ltd.)

ITA - 522 / 2023HC Delhi13 Sept 2023
Section 14ASection 36(1)(vii)

…tutory Liquidity Ratio (SLR) are its stock-in- trade and not investments and income arising out of those is attributable, to business of banking. This Circular came to be issued in the aftermath of CIT Vs. Nawanshahar Central Cooperative Bank Ltd. [(2007) 15 SCC 611] / [(2007) 160 TAXMAN 48 (SC) ] wherein this Court had held that investments made by a banking concern is part of their banking business. Hence the income earned through such investments would fall under the head Profits & Gains of business. ….” [Also see PCIT v. State Bank of Patiala, 2017 (393) ITR 476 (P&H)] 6. In our opinion, the Trib…

Pr. Commissioner of Income Tax-7 vs. Oriental Bank of Commerce Ltd (Now Merged With Punjab National Bank Ltd.)

ITA - 521 / 2023HC Delhi13 Sept 2023
Section 14ASection 36(1)(vii)

…tutory Liquidity Ratio (SLR) are its stock-in- trade and not investments and income arising out of those is attributable, to business of banking. This Circular came to be issued in the aftermath of CIT Vs. Nawanshahar Central Cooperative Bank Ltd. [(2007) 15 SCC 611] / [(2007) 160 TAXMAN 48 (SC) ] wherein this Court had held that investments made by a banking concern is part of their banking business. Hence the income earned through such investments would fall under the head Profits & Gains of business. ….” [Also see PCIT v. State Bank of Patiala, 2017 (393) ITR 476 (P&H)] 6. In our opinion, the Trib…

Oriental Bank of Commerce, Gurgaon vs. ACIT, Spl. Range-07, New Delhi

In the result, the appeal filed by the Assessee stands allowed

ITA 740/DEL/2020[2016-17]Status: DisposedITAT Delhi31 Mar 2023AY 2016-17

Bench: Shri Anil Chaturvedi & Shri N.K. Choudhryassessment Year: 2016-17

For Appellant: Sh. KVSR Krishna, Ld. CA &For Respondent: Ms. Sarita Kumar, Ld. CIT/DR
Section 115JSection 14ASection 250Section 36

…IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘E’ NEW DLEHI BEFORE SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER AND SHRI N.K. CHOUDHRY, JUDICIAL MEMBER Assessment Year: 2016-17 Punjab National Bank, VersuS Addl. Commissioner of (Successor of erstwhile Oriental Income-tax, Spcl. Range-7 Bank of Commerce), Finance New Delhi. Division, Plot No. 4, Sector-10, Dwarka, New Delhi PAN: AAACP0165G (Appellant) (Respondent) Appellant by : Sh. KVSR Krishna, Ld. CA & Sh. Aman Goel, Ld. CA Respondent by : Ms. Sarita Kumar, Ld. CIT/DR Date of hearing: 06.03.2023 Date of order : 31.03.2023 ORDER PER N.K. CHOUDHRY, J.M. Th…

ACIT, Circle- 19(1), New Delhi vs. Oriental Bank of Commerce, Gurgaon

In the result, the appeals of the assessee are allowed and the appeals of the Revenue are dismissed

ITA 1812/DEL/2018[2015-16]Status: DisposedITAT Delhi04 Mar 2022AY 2015-16

Bench: Sh. A. D. Jain, Vice-Dr. B. R. R. Kumarita No. 1581/Del/2017 : Asstt. Year : 2012-13 Ita No. 1582/Del/2017 : Asstt. Year : 2013-14 Ita No. 1583/Del/2017 : Asstt. Year : 2014-15 Ita No. 1199/Del/2018 : Asstt. Year : 2015-16 Oriental Bank Of Commerce, Vs Addl. Cit, Central Accounts Office, Plot No. 5, Range-13 (Present Range-19) Sector-32, Institutional Area, New Delhi Gurgaon-122001 Dcit/Acit, Circle-19(1), New Delhi (Appellant) (Respondent) Pan No. Aaaco0191M

For Appellant: Sh. KVSR Krishna, CAFor Respondent: Ms. Sarita Kumari, CIT DR
Section 14A

…Statutory Liquidity Ratio (SLR) are its stock-in- trade and not investments and income arising out of those is attributable, to business of banking. This Circular came to be issued in the aftermath of CIT Vs. Nawanshahar Central Cooperative Bank Ltd. [(2007) 15 SCC 611] / [(2007) 160 TAXMAN 48 (SC) ] wherein this Court had held that investments made by a banking concern is part of their banking business. Hence the income earned through such investments would fall under the head Profits & ITA No.1581 & Ors./Del/2017 4 ITA No. 1199 & Ors./Del/2018 Oriental Bank of Commerce Gains of business. The Punjab and Hary…

Oriental Bank of Commerce, Gurgaon vs. ACIT, Circle- 19(1), New Delhi

In the result, the appeals of the assessee are allowed and the appeals of the Revenue are dismissed

ITA 1199/DEL/2018[2015-16]Status: DisposedITAT Delhi04 Mar 2022AY 2015-16

Bench: Sh. A. D. Jain, Vice-Dr. B. R. R. Kumarita No. 1581/Del/2017 : Asstt. Year : 2012-13 Ita No. 1582/Del/2017 : Asstt. Year : 2013-14 Ita No. 1583/Del/2017 : Asstt. Year : 2014-15 Ita No. 1199/Del/2018 : Asstt. Year : 2015-16 Oriental Bank Of Commerce, Vs Addl. Cit, Central Accounts Office, Plot No. 5, Range-13 (Present Range-19) Sector-32, Institutional Area, New Delhi Gurgaon-122001 Dcit/Acit, Circle-19(1), New Delhi (Appellant) (Respondent) Pan No. Aaaco0191M

For Appellant: Sh. KVSR Krishna, CAFor Respondent: Ms. Sarita Kumari, CIT DR
Section 14A

…Statutory Liquidity Ratio (SLR) are its stock-in- trade and not investments and income arising out of those is attributable, to business of banking. This Circular came to be issued in the aftermath of CIT Vs. Nawanshahar Central Cooperative Bank Ltd. [(2007) 15 SCC 611] / [(2007) 160 TAXMAN 48 (SC) ] wherein this Court had held that investments made by a banking concern is part of their banking business. Hence the income earned through such investments would fall under the head Profits & ITA No.1581 & Ors./Del/2017 4 ITA No. 1199 & Ors./Del/2018 Oriental Bank of Commerce Gains of business. The Punjab and Hary…

ACIT, New Delhi vs. M/S. Oriental Bank of Commerce, Gurgaon

In the result, the appeals of the assessee are allowed and the appeals of the Revenue are dismissed

ITA 2174/DEL/2017[2014-15]Status: DisposedITAT Delhi04 Mar 2022AY 2014-15

Bench: Sh. A. D. Jain, Vice-Dr. B. R. R. Kumarita No. 1581/Del/2017 : Asstt. Year : 2012-13 Ita No. 1582/Del/2017 : Asstt. Year : 2013-14 Ita No. 1583/Del/2017 : Asstt. Year : 2014-15 Ita No. 1199/Del/2018 : Asstt. Year : 2015-16 Oriental Bank Of Commerce, Vs Addl. Cit, Central Accounts Office, Plot No. 5, Range-13 (Present Range-19) Sector-32, Institutional Area, New Delhi Gurgaon-122001 Dcit/Acit, Circle-19(1), New Delhi (Appellant) (Respondent) Pan No. Aaaco0191M

For Appellant: Sh. KVSR Krishna, CAFor Respondent: Ms. Sarita Kumari, CIT DR
Section 14A

…Statutory Liquidity Ratio (SLR) are its stock-in- trade and not investments and income arising out of those is attributable, to business of banking. This Circular came to be issued in the aftermath of CIT Vs. Nawanshahar Central Cooperative Bank Ltd. [(2007) 15 SCC 611] / [(2007) 160 TAXMAN 48 (SC) ] wherein this Court had held that investments made by a banking concern is part of their banking business. Hence the income earned through such investments would fall under the head Profits & ITA No.1581 & Ors./Del/2017 4 ITA No. 1199 & Ors./Del/2018 Oriental Bank of Commerce Gains of business. The Punjab and Hary…

ACIT, New Delhi vs. M/S. Oriental Bank of Commerce, Gurgaon

In the result, the appeals of the assessee are allowed and the appeals of the Revenue are dismissed

ITA 2173/DEL/2017[2013-14]Status: DisposedITAT Delhi04 Mar 2022AY 2013-14

Bench: Sh. A. D. Jain, Vice-Dr. B. R. R. Kumarita No. 1581/Del/2017 : Asstt. Year : 2012-13 Ita No. 1582/Del/2017 : Asstt. Year : 2013-14 Ita No. 1583/Del/2017 : Asstt. Year : 2014-15 Ita No. 1199/Del/2018 : Asstt. Year : 2015-16 Oriental Bank Of Commerce, Vs Addl. Cit, Central Accounts Office, Plot No. 5, Range-13 (Present Range-19) Sector-32, Institutional Area, New Delhi Gurgaon-122001 Dcit/Acit, Circle-19(1), New Delhi (Appellant) (Respondent) Pan No. Aaaco0191M

For Appellant: Sh. KVSR Krishna, CAFor Respondent: Ms. Sarita Kumari, CIT DR
Section 14A

…Statutory Liquidity Ratio (SLR) are its stock-in- trade and not investments and income arising out of those is attributable, to business of banking. This Circular came to be issued in the aftermath of CIT Vs. Nawanshahar Central Cooperative Bank Ltd. [(2007) 15 SCC 611] / [(2007) 160 TAXMAN 48 (SC) ] wherein this Court had held that investments made by a banking concern is part of their banking business. Hence the income earned through such investments would fall under the head Profits & ITA No.1581 & Ors./Del/2017 4 ITA No. 1199 & Ors./Del/2018 Oriental Bank of Commerce Gains of business. The Punjab and Hary…

Oriental Bank of Commerce, Gurgaon vs. DCIT, New Delhi

In the result, the appeals of the assessee are allowed and the appeals of the Revenue are dismissed

ITA 1583/DEL/2017[2014-15]Status: DisposedITAT Delhi04 Mar 2022AY 2014-15

Bench: Sh. A. D. Jain, Vice-Dr. B. R. R. Kumarita No. 1581/Del/2017 : Asstt. Year : 2012-13 Ita No. 1582/Del/2017 : Asstt. Year : 2013-14 Ita No. 1583/Del/2017 : Asstt. Year : 2014-15 Ita No. 1199/Del/2018 : Asstt. Year : 2015-16 Oriental Bank Of Commerce, Vs Addl. Cit, Central Accounts Office, Plot No. 5, Range-13 (Present Range-19) Sector-32, Institutional Area, New Delhi Gurgaon-122001 Dcit/Acit, Circle-19(1), New Delhi (Appellant) (Respondent) Pan No. Aaaco0191M

For Appellant: Sh. KVSR Krishna, CAFor Respondent: Ms. Sarita Kumari, CIT DR
Section 14A

…Statutory Liquidity Ratio (SLR) are its stock-in- trade and not investments and income arising out of those is attributable, to business of banking. This Circular came to be issued in the aftermath of CIT Vs. Nawanshahar Central Cooperative Bank Ltd. [(2007) 15 SCC 611] / [(2007) 160 TAXMAN 48 (SC) ] wherein this Court had held that investments made by a banking concern is part of their banking business. Hence the income earned through such investments would fall under the head Profits & ITA No.1581 & Ors./Del/2017 4 ITA No. 1199 & Ors./Del/2018 Oriental Bank of Commerce Gains of business. The Punjab and Hary…

Oriental Bank of Commerce, Gurgaon vs. DCIT, New Delhi

In the result, the appeals of the assessee are allowed and the appeals of the Revenue are dismissed

ITA 1582/DEL/2017[2013-14]Status: DisposedITAT Delhi04 Mar 2022AY 2013-14

Bench: Sh. A. D. Jain, Vice-Dr. B. R. R. Kumarita No. 1581/Del/2017 : Asstt. Year : 2012-13 Ita No. 1582/Del/2017 : Asstt. Year : 2013-14 Ita No. 1583/Del/2017 : Asstt. Year : 2014-15 Ita No. 1199/Del/2018 : Asstt. Year : 2015-16 Oriental Bank Of Commerce, Vs Addl. Cit, Central Accounts Office, Plot No. 5, Range-13 (Present Range-19) Sector-32, Institutional Area, New Delhi Gurgaon-122001 Dcit/Acit, Circle-19(1), New Delhi (Appellant) (Respondent) Pan No. Aaaco0191M

For Appellant: Sh. KVSR Krishna, CAFor Respondent: Ms. Sarita Kumari, CIT DR
Section 14A

…Statutory Liquidity Ratio (SLR) are its stock-in- trade and not investments and income arising out of those is attributable, to business of banking. This Circular came to be issued in the aftermath of CIT Vs. Nawanshahar Central Cooperative Bank Ltd. [(2007) 15 SCC 611] / [(2007) 160 TAXMAN 48 (SC) ] wherein this Court had held that investments made by a banking concern is part of their banking business. Hence the income earned through such investments would fall under the head Profits & ITA No.1581 & Ors./Del/2017 4 ITA No. 1199 & Ors./Del/2018 Oriental Bank of Commerce Gains of business. The Punjab and Hary…

Oriental Bank of Commerce, Gurgaon vs. Addl. CIT, New Delhi

In the result, the appeals of the assessee are allowed and the appeals of the Revenue are dismissed

ITA 1581/DEL/2017[2012-13]Status: DisposedITAT Delhi04 Mar 2022AY 2012-13

Bench: Sh. A. D. Jain, Vice-Dr. B. R. R. Kumarita No. 1581/Del/2017 : Asstt. Year : 2012-13 Ita No. 1582/Del/2017 : Asstt. Year : 2013-14 Ita No. 1583/Del/2017 : Asstt. Year : 2014-15 Ita No. 1199/Del/2018 : Asstt. Year : 2015-16 Oriental Bank Of Commerce, Vs Addl. Cit, Central Accounts Office, Plot No. 5, Range-13 (Present Range-19) Sector-32, Institutional Area, New Delhi Gurgaon-122001 Dcit/Acit, Circle-19(1), New Delhi (Appellant) (Respondent) Pan No. Aaaco0191M

For Appellant: Sh. KVSR Krishna, CAFor Respondent: Ms. Sarita Kumari, CIT DR
Section 14A

…Statutory Liquidity Ratio (SLR) are its stock-in- trade and not investments and income arising out of those is attributable, to business of banking. This Circular came to be issued in the aftermath of CIT Vs. Nawanshahar Central Cooperative Bank Ltd. [(2007) 15 SCC 611] / [(2007) 160 TAXMAN 48 (SC) ] wherein this Court had held that investments made by a banking concern is part of their banking business. Hence the income earned through such investments would fall under the head Profits & ITA No.1581 & Ors./Del/2017 4 ITA No. 1199 & Ors./Del/2018 Oriental Bank of Commerce Gains of business. The Punjab and Hary…

The Shri Bajrang Alloys Ltd., Raipur (Cg) vs. The Dy. Commissioner of Income Tax 1(2), Raipur (Cg)

The appeal of the assessee is allowed in terms of our aforesaid observations

ITA 174/BIL/2016[2012-13]Status: DisposedITAT Raipur21 Feb 2022AY 2012-13

Bench: Shri Ravish Sood & Shri Jamlappa D Battullआयकर अपील सं. / Ita No. 174/Rpr/2016 "नधा"रण वष" / Assessment Year : 2012-13 Shri Bajrang Alloys Limited 521/Cit(A), Industrial Area, Urla, Raipur (C.G) Pan : Aaecs9218D .......अपीलाथ" / Appellant बनाम / V/S.

For Appellant: Shri Amit M Jain, A.RFor Respondent: Shri G.N Singh, D.R
Section 143(2)Section 143(3)Section 14A

…ication would not arise against the appellants, from the said circular. 27. The aforesaid discussion and the cited judgments advise this Court to conclude that the proportionate disallowance of interest is not warranted, under Section 14A of Income 12 [(2007) 15 SCC 611] / [(2007) 160 TAXMAN 48 (SC)] 13 2017 (393) ITR 476 (P&H) Tax Act for investments made in tax free bonds/ securities which yield tax free dividend and interest to Assessee Banks in those situations where, interest free own funds available with the Assessee, exceeded 12 A.Y.2012-13 their investments. With this conclusion, we unhesitatingly agree…

Kothari Products Ltd., Kanpur vs. Astt. Commissioner of Income Tax, Kanpur

In the result, both the appeals of the assessee stand allowed for statistical purposes

ITA 255/LKW/2015[2009-10]Status: DisposedITAT Lucknow20 Oct 2021AY 2009-10

Bench: Shri A. D. Jain & Shri T. S. Kapoorassessment Year:2009-10 &

Section 14ASection 14A(2)Section 4A

…m the said circular. I.T.A. No.928/Lkw/2014 10 I.T.A. No.255/Lkw/2015 27. The aforesaid discussion and the cited judgments advise this Court to conclude that the proportionate disallowance of interest is not warranted, under Section 14A of Income 12 [(2007) 15 SCC 611] / [(2007) 160 TAXMAN 48 (SC)] 13 2017 (393) ITR 476 (P&H) Page 19 of 22 Tax Act for investments made in tax free bonds/ securities which yield tax free dividend and interest to Assessee Banks in those situations where, interest free own funds available with the Assessee, exceeded their investments. With this conclusion, we unhesitatingly agree wi…

Kothari Products Ltd., Kanpur vs. Asstt. Commissioner of Income Tax, Kanpur

In the result, both the appeals of the assessee stand allowed for statistical purposes

ITA 928/LKW/2014[2010-11]Status: DisposedITAT Lucknow20 Oct 2021AY 2010-11

Bench: Shri A. D. Jain & Shri T. S. Kapoorassessment Year:2009-10 &

Section 14ASection 14A(2)Section 4A

…m the said circular. I.T.A. No.928/Lkw/2014 10 I.T.A. No.255/Lkw/2015 27. The aforesaid discussion and the cited judgments advise this Court to conclude that the proportionate disallowance of interest is not warranted, under Section 14A of Income 12 [(2007) 15 SCC 611] / [(2007) 160 TAXMAN 48 (SC)] 13 2017 (393) ITR 476 (P&H) Page 19 of 22 Tax Act for investments made in tax free bonds/ securities which yield tax free dividend and interest to Assessee Banks in those situations where, interest free own funds available with the Assessee, exceeded their investments. With this conclusion, we unhesitatingly agree wi…

The South Indian Bank Ltd vs. The Commissioner of Income Tax

C.A. No.-009606-009606 - 2011Supreme Court09 Sept 2021

Bench: HON'BLE MR. JUSTICE HRISHIKESH ROY

Section 14Section 14A

…ion would not arise against the appellants, from the said circular. 27. The aforesaid discussion and the cited judgments advise this Court to conclude that the proportionate disallowance of interest is not warranted, under Section 14A of Income 12 [(2007) 15 SCC 611] / [(2007) 160 TAXMAN 48 (SC)] 13 2017 (393) ITR 476 (P&H) Page 19 of 22 Tax Act for investments made in tax free bonds/ securities which yield tax free dividend and interest to Assessee Banks in those situations where, interest free own funds available with the Assessee, exceeded their investments. With this conclusion, we unhesitatingly agre…

Shri. Shankarlal Gilada vs. The Income Tax Officer

ITA/200002/2018HC Karnataka22 Jan 2020

Bench: G.NARENDAR,M.NAGAPRASANNA

Section 143(3)Section 14ASection 260A

…CBDT has issued Circular No. 18/2015 dated 2-11-2015. 16 46. This circular has already been reproduced in para 27 above. This circular takes note of the judgment of this Court in Nawanshahar case [CIT v. Nawanshahar Central Coop. Bank Ltd., (2007) 15 SCC 611 : (2007) 289 ITR 6 : (2007) 160 Taxman 48] wherein it is held that investments made by a banking concern are part of the business or banking. Therefore, the income arising from such investments is attributable to business of banking falling under the head “profits and gains of business and profession”. On that basis, the circular contains t…