Case Law Details
CIT Vs The Maratha Mandir Co-op. Bank Ltd. (Bombay High Court)- Interest income in the present case arose on account of giving advance rent to the landlord from whom premises were taken on rent for the purpose of carrying on banking business. Thus, the interest income in the present case is closely connected to the banking business carried on by the assessee. Thirdly, the Reserve Bank of India, controlling the banking business in India has issued guidelines on 18/6/1987 thereby permitting the co-operative banks to give advance rent to the landlords (from whom premises are taken for carrying on the business) subject to charging interest and other conditions set out therein. Thus. the interest income on advance rent is earned in accordance with the norms laid down by RBI and hence it would be income earned during the course of carrying on the business of banking.
CIT Vs The Maratha Mandir Co-op. Bank Ltd.
Decided by- Bombay High Court
Income Tax Appeal No. 4125 Of 2010
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