2002 (9) TMI 15

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....me 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 assessee is a co-operative bank within the meaning of section 2(b-1) of the Karnataka Co-operative Societies Act, 1959, and is registered as such under the provisions of the said Act. It is a regional rural bank within the meaning of the Regional Rural Banks Act, 1976. As per section 22 of the latter Act it is to be deemed to be a co-operative society for the purpose of the Act. It appears that the above investments were made by the assessee-bank out of its surplus funds. The Assessing Officer disallowed the deduction....

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....f 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 necessary for us to dilate. We think that it is in the interests of justice that the assessee should have the opportunity to lead evidence before the Commissioner (Appeals) to establish as a fact what is stated above. So far as the second question is concerned, therefore, the matter is stand restored to the Commissioner (Appeals) for being decided afresh. He shall also decide any consequential issue that may arise." A bare reading of the above passage from the judgment of the Supreme Court makes it clear that the....