2012 (1) TMI 223

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....avings Fixed Deposit Scheme. 3. Ms. Vijayaprabha, the ld.DR submitted that the assessee, a co-operative bank, deposited in the small savings scheme promoted by Kerala Government and claimed the interest accrued thereon as exempt u/s 80P(2)(a)(i) of the Act. Referring to the order of the Commissioner of Income-tax(A), the ld.DR submitted that the Commissioner of Income-tax(A) by following the judgment of the Apex Court in Commissioner of Income-tax vs Karnataka State Co-operative Apex Bank (2001) 251 ITR 194 (SC) and Commissioner of Income-tax vs Ramanathapuram District Co-operative Central Bank Ltd (2002) 255 ITR 423 (SC) found that the interest received by the assessee is entitled for deduction u/s 80P(2)(a)(i). Referring to the judgmen....

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....ting capital. According to the ld.counsel, this judgment of the Apex Court in the case of Commissioner of Income-tax vs Karnataka State Co-operative Apex Bank (supra) was pronounced by three Judges' Bench of the Apex court. However, the judgment in Totgar's Co-operative Sale Society Ltd vs ITO (supra) was delivered by 2 Judge's Bench of the Apex Court. Moreover, there was no reference about the judgment in Karnataka State Co-operative Apex Bank (supra) in the judgment in the case of Totgar's Co-operative Sale Society Ltd (supra). Therefore, according to the ld.representative, this judgment of the Apex Court in Totgar's Co-operative Sale Society Ltd (supra) is not applicable to the facts of the case. The ld.counsel has also pointed out that ....

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....und that interest on Indira Vikas Patra is eligible for deduction u/s 80P. The SLP filed by the department was dismissed by the Apex court. Referring to the government order in G.O. (Rt.) No./1911/2000/Fin dated 29-03-2000, the ld.counsel for the assessee submitted that since the Government of India has withdrawn Indira Vikas Patra, as a small savings investment, the state government formulated the scheme, known as "Kerala Government Treasury Small Savings Fixed Deposit Scheme". Accordingly, the co-operative societies are instructed to deposit the funds in the treasury small savings fixed deposit certificate scheme instead of Indira Vikas Patras. 5. We have considered the rival submission on either side and also perused the material avai....