TMI Blog2003 (8) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... s - appeal is liable to be rejected and accordingly, it is rejected. - - - - - Dated:- 7-8-2003 - Judge(s) : P. VISHWANATHA SHETTY., AJIT J. GUNJAL. The judgment of the court was delivered by P. VISHWANATHA SHETTY J. -In this appeal, filed under section 260A of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), the appellant has called in question the correctness of the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act in respect of the interest and dividend earned by it out of the investment made by it in other banking institutions. However, Smt. Madhumita Bagchi, learned counsel appearing for the appellant, challenging the correctness of the impugned order submitted that the finding recorded by the Tribunal is erroneous in law. In our view, there is no merit in the submission made by Smt. Bagchi. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss. But the view taken by the Commissioner of Income-tax (Appeals) was that the determination of the nature claimed herein could be granted only in a case where investments are made out of statutory reserve funds. The reasoning on its very face is contrary to the law laid down by the Supreme Court in the case of Bihar State Co-operative Bank Ltd. v. CIT [1960] 39 ITR 114. In this case, the Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke investments which earn them interest instead of letting moneys lie idle. It cannot be said that the funds of the bank which were not lent to borrowers but were laid out in the form of deposits in another bank to add to the profit instead of lying idle necessarily ceased to be a part of the stock-in-trade of the bank, or that the interest arising therefrom did not form part of its business profi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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