2003 (9) TMI 6

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..... ding that the income from such investment could be said to be from banking business and exempt under section 80(2)(a)(i) of the Income-tax Act, 1961?" - There is no doubt, and it is not disputed, that the assessee-co-operative bank is required to place a part of its funds with the State Bank or the Reserve Bank of India to enable it to carry on its banking business. This being so, any income deriv .....

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..... court the following questions: "1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the investment of the reserves and other funds in various securities did not require the sanction of the Registrar of the Co-operative Societies under section 63 of the Co-operative Societies Act? 2. Whether, on the facts and in the circumstances of the case, .....

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..... e income from investment of reserves and other funds could be said to be from banking business and exempted it under section 80P(2)(a)(i) of the Income-tax Act, 1961. On the other hand, learned counsel for the assessee supported the judgment of the learned Tribunal. We have given our thoughtful and anxious consideration to the submissions made by learned counsel for the parties. In Madhya Prade .....

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..... Bank Ltd. [1996] 218 ITR 438 (SC). There is no doubt, and it is not disputed, that the assessee-co-operative bank is required to place a part of its funds with the State Bank or the Reserve Bank of India to enable it to carry on its banking business. This being so, any income derived from funds so placed arises from the business carried on by it and the assessee has not, by reason of section 80P( .....

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..... as we have put it above. . ." In view of this pronouncement of the hon'ble apex court the contention advanced by learned counsel for the Revenue cannot be accepted. As a result of the aforesaid discussion, the questions referred for the opinion of this court by the learned Tribunal accordingly, are answered in the affirmative and in favour of the assessee. No order as to costs.
Case laws, De .....

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