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2012 (1) TMI 223 - ITAT COCHIN
Deduction u/s 80P(2)(a)(i) - interest received by the assessee from the deposit made in Kerala Government Treasury Small Savings Fixed Deposit Scheme - Held that:- Since Government of India has withdrawn India Vikas Patra, as a small savings instrument, funds invested at the discretion of the bank is one of the activities of the banking as per the Banking Regulation Act. Since the assessee co-operative society is in the business of banking the investment in the state promoted treasury small savings fixed deposit certificate scheme is a banking activity, therefore, the interest accrued on such investment has to be treated as business income in the course of its banking activity. Once it is a business income, the assessee is entitled for deduction u/s 80P(2)((a)(i). therefore, this Tribunal is of the opinion that the judgment of the Larger Bench of the apex Court in Karnataka State Cooperative Apex Bank (2001 (8) TMI 9 - SUPREME Court) is applicable to the facts of this case. Appeal of the revenue stands dismissed.