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TMI Blog2010 (7) TMI 296X X X X Extracts X X X X X X X X Extracts X X X X ..... ce no bank would like its reserve funds to remain idle and not earn any interest - interest earned on such deposits is directly attributable to the business of banking - questions raised are answered in favour of the assessee and against the revenue and the appeal is dismissed - 28 of 2010 - - - Dated:- 22-7-2010 - Mr.Justice Deepak Gupta, Mr. Justice Sanjay Karol, JJ.. For the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anshaher Central Cooperative Bank, whereas that judgement related to income from investment of statutory reserves only?" These questions stands squarely covered by a judgement of this Court dated 3rd November, 2009 delivered in Commissioner of Income-tax vs. M/s H.P.State Cooperative Bank Ltd, wherein it was held as follows:- "Any banking institution, carrying on banking business will not keep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iety is part of banking business. We are, therefore, of the considered view that the investment of the funds by the banks including the non reserves were part of the banking activities since no bank would like its reserve funds to remain idle and not earn any interest. This is not only prudent business management but is also a part of the activity of banking. Therefore, the interest earned on such ..... X X X X Extracts X X X X X X X X Extracts X X X X
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