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2023 (9) TMI 486 - CALCUTTA HIGH COURTDeduction u/s 80P(2)(a)(i) - Income earned by co-operative Bank on deposits of its non SLR deposits (i.e. funds other than those advanced as loans and the banking reserves) - HELD THAT:- The substantial questions of law raised by the revenue have been answered in favour of the assessee and against the revenue in the case of Commissioner of Income Tax vs. Karnataka State Co-operative Apex Bank [2001 (8) TMI 9 - SUPREME COURT] and Mehsana District Central Co-operative Bank Ltd. [2001 (8) TMI 15 - SUPREME COURT]. In the said decision, it has been held that interest arising from investment made, in compliance with statutory provisions to enable the co-operative society to carry on banking business, out of reserve fund by such society engaged in banking business, is exempt under Section 80P(2)(a)(i) - placement of such funds being imperative for the purpose of carrying on banking business the income therefrom would be income from the assessee’s business. Therefore, it was held that the assessee/co-operative society was entitled to deduction under Section 80P(2)(a)(i) of the Act in respect of interest earned from funds utilised for such statutory reserves. Decided against the revenue.
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