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2014 (8) TMI 168 - HC - Income TaxExemption u/s 80P - Interest from investment voluntary reserve – Whether the income is income from banking business or not – Held that:- Following the decision in Mehsana District Co-operative Bank Ltd. Versus Income-Tax Officer [2001 (8) TMI 15 - SUPREME Court] - the assessee shall be entitled to the exemption under Section 80P(2)(a)(i) of the Act - if, the investments are made in the security, which is permissible mode of investment, the assessee shall be entitled to the special deduction - Section 80P(2)(a)(i) of the Act requires a Co-operative Society, and not a Co-operative Bank to be engaged in carrying on business of banking it is not possible to restrict the scope of the business to the definition of 'Banking' under section 5(b) of the Banking Regulation Act - Even otherwise, a banking company including a co-operative society, may accept deposits for the purpose of lending or investment - The definition does not stipulate that investment has to be only to the extent provided either by the Gujarat Cooperative Societies Act or the Banking Regulation Act - when investments are made in securities, which are a permissible mode of investment, income arising therefrom would be attributable to the business of banking and the assessee would be eligible for deduction in terms of section 80P(2)(a)(i) – Decided in favour of Assessee.
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