Law: Income Tax Act (XI of 1922)

Section: 10

Law: Banks (Nationalization) Act (XIX of 1974)-

Section: 5(5)

(a) Income-tax Act (XI of 1922) S. 10 and Banks (Nationalisation) Act (XIX of 1974), S. 5(5) Character of Banks as corporate bodies not lost after nationali sation-Immunity from payment of income-tax cannot be claimed: (b) Income-tax Act (XI of 1922)  S. 10-Profits and gains of business-Occasional transaction with profit but not directly connected with trade or business carried on by assessee-Will not convert proceeds into revenue receipts-Banking company guaging tempo of time investing their securities in real gilt- edged securities, and thereby reaping some considerable profits in the bargain-Such purchase and sale not in course of company's business and as such not revenue profits. An occasional transaction with profit but not directly connected with the trade or business, will however not convert the proceeds into revenue receipts, unless the nature of the transaction, with reference to the commodity so, warrants. It does not necessarily follow from the circumstances, that the company sees fit to sell a block of its Government securities whether the purchase be to get a better return, or whether the purpose be to increase the reserve fund, by taking profit the realisation of a particular block, that the company is trading on purchase and sale of securities, forming its reserve fund. Occasional transactions of that kind are not necessarily trading at all, whether in the case of a private individual, a trust or an insurance company. Punjab Co-operative Bank v. Commissioner of Income-tax, Punjab (1940) 8 I T R 635 ; California Copper Syndicate v. Harris 5 Tax Cas. 159 ; Leeming v. Jones 15 Tax Cas. 333 ; Bologownie Land Trust Ltd. v. The Commissioner of Inland Revenue 14 Tax Cas. 684; Commissioner of Inland Revenue v. Fraser 1942 S C 493 ; Commissioner of Inland Revenue v. The Scotch Automobile and General Insurance Co. 16 Tax Cas. 381 and Commissioner of Inland Revenue v.. Reinhold 34 Tax Cas. 389 ref. Dates of hearing : 20th and 23rd September 1974.                                                          …