9911796707
TMI Blog2002 (9) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal is accordingly dismissed. - - - - - Dated:- 5-9-2002 - Judge(s) : G. C. BHARUKA., S. B. MAJAGE. JUDGMENT The judgment of the court was delivered by G. C. BHARUKA J. - This is an appeal preferred by the Department under section 260A of the Income-tax Act, 1961 ("the Act" for short). The only question involved herein is whether the Tribunal is justified in holding that the respondent-assessee is entitled to deduction under section 80P(2)(a)(i) of the Act in respect of the interest and dividend income of Rs. 2,50,664 derived out of investment in National Savings Certificates, Indira Vikas Patras, Kisan Vikas Patras, short-term fixed deposits in banks and shares of Maharashtra State Finance Corporation of India. The asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 522. The passage of the judgment on which learned counsel has relied is to the following effect (page 524): "Now, as to the second question, we have heard learned counsel and been referred to various decisions, including the decision of this court in Bihar State Co-operative Bank Ltd. v. CIT [1960] 39 ITR 114. To be able to answer the question, it is necessary to ascertain, as a fact, whether the income derived by the assessee from the investment of its voluntary reserves has been utilised by it in the course of its ordinary banking business. Though the assessee placed before the assessing authority its books of account and balance-sheets, the fact aforestated was not considered at any stage, for one or other reason on which it is not ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 114. In this case the Supreme Court has held that (page 122): "As we have pointed out above, it is a normal mode of carrying on banking business to invest moneys in a manner that they are readily available and that is just as much a part of the mode of conducting a bank's business as receiving deposits or lending moneys or discounting hundies or issuing demand drafts. That is how the circulating capital is employed and that is the normal course of business of a bank. The moneys laid out, in the form of deposits as in the instant case would not cease to be a part of the circulating capital of the appellant nor would they cease to form part of its banking business. The returns flowing from them would form part of its profits from its b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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