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2003 (9) TMI 6 - HC - Income TaxExemption under section 80(2)(a)(i) – banking - investment of the reserves and other funds in various securities - Whether, Tribunal was right in holding that the income from such investment could be said to be from banking business and exempt under section 80(2)(a)(i) of the Income-tax Act, 1961?" - There is no doubt, and it is not disputed, that the assessee-co-operative bank is required to place a part of its funds with the State Bank or the Reserve Bank of India to enable it to carry on its banking business. This being so, any income derived from funds so placed arises from the business carried on by it and the assessee has not, by reason of section 80P(2)(a)(i), to pay income-tax thereon. The placement of such funds being imperative for the purposes of carrying on the banking business, the income derived therefrom would be income from the assessee's business – question is answered in the affirmative and in favour of the assessee
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