2011 (6) TMI 215 - HC - Income Tax

Exemption under section 80P(2)(a)(i) - whether a cooperative society carrying on the business of banking is entitled to claim exemption under section 80P(2)(a)(i) of the Act in respect of the income derived out of the investments made from voluntary reserves of such society - As per the case Muzaffar Nagar Kshetriya Gramin Bank Ltd. v.CIT [2010 -TMI - 76320 - ALLAHABAD HIGH COURT]held ,that the deposit exceeding SLR was also in relation to banking activity, and hence income accrued out of such deposit is also attributable to the banking business which is deductible under section 80P(2)(a)(i) of the Act - Hence, Tribunal correctly recorded a finding that the income earned by the respondents/cooperative banks is attributable to the business of banking and, therefore, exempt from income-tax under section 80P(2)(a)(i) of the Act - Decided in favour of assessee.