1. This is an application under section 256(1) of the Income-tax Act, 1961, arising out of the order dated February 28, 1990, passed by the Tribunal, Bench (E), New Delhi. The dispute relates to the assessment year 1982-83.
2. Brief facts of the case giving rise to this appeal are that the assessee is a co-operative society engaged in the business of banking. The assessee for the assessment year in question showed income of Rs. 21,578 and claimed the same to be exempted under section 80P(2) of the Income-tax Act on the ground that it related to banking activities. The Income-tax Officer did not accept the claim of the assessee and made an assessment on total income of Rs. 17,980. Being aggrieved, the respondent-bank preferred an appeal before the Commissioner of Income-tax (Appeals).
3. The Commissioner of Income-tax (Appeals) after perusing the record allowed the claim of the assessee of exemption following the earlier order of the Tribunal dated January 4, 1985, in the own case of the assessee in I.T.A No. 319.Del/1984 for the assessment year 1980-81. Feeling aggrieved, the Department went in appeal before the Tribunal. The Tribunal after perusing the entire material available with it, dismissed the appeal of the Department. Therefore, the following question of law has been sent to be answered by this court:
“Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the assessee's rental income was exempted under section 80P of the Income-tax Act, 1961?”
4. We have heard learned counsel for the parties and perused the entire material available with us. Section 80P of the Income-tax Act, 1961, deals with the deduction in respect of income of co-operative societies. Subclause (i) of clause (a) of sub-section (2) of section 80P provides for deduction in respect of income of co-operative societies which are engaged in carrying on the business of banking or providing credit facilities to its members. The said sub-section clearly provides that only the banking business is exempted and not any other income is exempted. In the present case also, the assessee derived the income from the house property and not from the banking business, therefore, the assessee cannot be exempted from the income derived by the house properly. The Income-tax Officer in this regard has also rightly recorded the finding that scrutiny of the details filed shows that the assessee received the income from house property amounting to Rs. 21,578. This income does not fall under the head “Income from business of banking” and as such it is liable to tax under the head “Income from house property”.
5. In view of the above, the order passed by the Income-tax Officer is sustained and the orders passed by the Commissioner of Income-tax (Appeals) as well as by the Tribunal are hereby quashed. The question framed is accordingly answered in favour of the Department and against the assessee. The reference application is disposed of accordingly.