CIRCULAR NO. 18\/2015 <\/strong><\/p>\n

F.No.279\/Misc.\/140\/2015\/ITJ
\n<\/strong><\/p>\n

Government of India <\/strong><\/p>\n

Ministry of Finance <\/strong><\/p>\n

Directorate of
\nIncome-tax <\/strong><\/p>\n

Legal & Research <\/strong><\/p>\n

******<\/p>\n

New Delhi, 2^{nd<\/sup> November, 2015 <\/p>\n}

 <\/p>\n

Subject: Interest
\nfrom Non-SLR securities of Banks – reg. <\/strong><\/p>\n

 <\/strong><\/p>\n

It has been brought to the notice of the Board that in the
\ncase of Banks, field officers are taking a view that, “expenses relatable
\nto investment in non-SLR securities need to be disallowed u\/s 57(i) of the Act
\nas interest on non-SLR securities is income from other sources.” <\/p>\n

 2. Clause (id) of sub-section (1) of Section 56 of the Act
\nprovides that income by way of interest on securities shall be chargeable to
\nincome-tax under the head “Income from Other Sources”, if, the income
\nis not chargeable to income-tax under the head “Profits and Gains of Business
\nand Profession”.<\/p>\n

 3. The matter has been examined in light of the judicial
\ndecisions on this issue. In the case of CIT Vs Nawanshahar Central Cooperative
\nBank Ltd. [2007] 160TAXMAN 48(SC), the Apex Court held that the investments
\nmade by a banking concern are part of the business of banking. Therefore, the
\nincome arising from such investments is attributable to the business of banking
\nfalling under the head “Profits and Gains of Business and
\nProfession”.<\/p>\n

 3.2 Even though the abovementioned decision was in the
\ncontext of co-operative societies \/ Banks claiming deduction under section 80P
\n(2)(a)(i) of the Act, the principle is equally applicable to all
\nbanks\/commercial banks, to which Banking Regulation Act, 1949 applies.<\/p>\n

 4. In the light of the Supreme Court’s decision in the
\nmatter, the issue is well settled. Accordingly, the Board has decided that no
\nappeals may henceforth be filed on this ground by the officers of the
\nDepartment and appeals already filed, if any, on this ground before
\nCourts\/Tribunals may be withdrawn \/ not pressed upon. This may be brought to
\nthe notice of all concerned.<\/p>\n

 <\/p>\n

Sd\/-<\/strong><\/p>\n

(D S Chaudhry) <\/strong><\/p>\n

CIT (A&J), CBDT, <\/strong><\/p>\n

New Delhi <\/strong><\/p>\n

 <\/p>\n

Copy to: <\/p>\n

1. The Chairperson, Members and officers of the CBDT of the
\nrank of Under Secretary and above. <\/p>\n

<\/p>\n

Download<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

CIRCULAR NO. 18\/2015 F.No.279\/Misc.\/140\/2015\/ITJ Government of India Ministry of Finance Directorate of Income-tax Legal & Research ****** New Delhi, 2nd November, 2015   Subject: Interest from Non-SLR securities of Banks – reg.   It has been brought to the notice of the Board that in the case of Banks, field officers are taking a view … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_uag_custom_page_level_css":"","_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[4],"tags":[39],"class_list":["post-1429","post","type-post","status-publish","format-standard","hentry","category-income-tax","tag-tax"],"yoast_head":"\n