2003 (1) TMI 37

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... of Firms and Societies, Chandigarh. The only dispute in the present appeals is as to whether the assessee is entitled to deduction under section 80P(2)(a)(i) of the Income-tax Act, 1961 (for short "the Act"), in respect of the income from the investment of rupees two crores in the purchase of 13.5 per cent. PSEB Bonds, 2003 First Series (for short the "Bonds") on September 20, 1993. As per the provisions of section 80P(2)(a)(i) of the Act, a co-operative society engaged in the business of banking or providing credit facilities to its members is entitled to deduction out of its taxable income of the whole of the amount of profits and gains of business attributable to the aforesaid activities. In the present case, the Assessing Officer h....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... it was held that the case of the assessee was fully covered by the decision of the Supreme Court in CIT v. Karnataka State Co-operative Apex Bank [2001] 251 ITR 194. Mr. N.L. Sharda, appearing on behalf of the appellant, contended that in a subsequent decision in Mehsana District Central Co-operative Bank Ltd. v. ITO [2001] 251 ITR 522, the Supreme Court has held that the question whether income derived by a co-operative bank from the investment of its voluntary reserves other than statutory reserves is exempt under section 80P(2)(a)(i) depended upon whether the voluntary reserves were utilised in the course of its ordinary banking business. He, therefore, pleaded that the matter needs to be decided afresh in the light of the observations....