SYNDICATE BANK Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE following questions of law arising out of the orders passed in I.T.A. Nos. 6 and 12 (Bangalore) of 1978-79 dated September 17, 1980, have been referred to this court under section 256(1) of the Income-tax Act, 1961, by the Income-tax Appellate Tribunal, Bangalore Bench, for opinion :

(2.) THE facts of the cases behind the above formulation of questions of law are these :

(3.) THE assessee appealed against the order of the Income-tax Officer to the Appellate Assistant Commissioner of Income-tax who confirmed the impugned order regarding the alleged revenue receipt amounting to Rs. 6,12,677 received by the assessee as "brokerage and commission". THE appellate authority held that the assessee acted in the capacity of an underwriter and not in the capacity of an investor while receiving the "brokerage and commission" and hence the money received is only revenue income. THE appellate Assistant Commissioner held that the assessee was carrying on the activity of an underwriter in the course of banking business and whatever brokerage and commission was received by the assessee was only in respect of the underwriting which the assessee had done though the assessee was the sole subscriber to the debentures and securities though being an underwriter.