TMI Blog2003 (1) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... rict Central Co-operative Bank Ltd.'s case - there is no merit in the present appeals which are, accordingly, dismissed in limine. - - - - - Dated:- 6-1-2003 - Judge(s) : N. K. SUD., N. K. SODHI. JUDGMENT The judgment of the court was delivered by N.K. SUD J.-This order shall dispose of two Income-tax Appeals Nos. 154 and 155 of 2002 involving common questions of law and facts. For the sake of convenience, the facts are being taken from Income-tax Appeal No. 155 of 2002 pertaining to the assessment year 1994-95. The assessee is a co-operative bank engaged in the banking business. It is registered with the Registrar of Firms and Societies, Chandigarh. The only dispute in the present appeals is as to whether the assessee is enti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the claim of the assessee. The Tribunal has referred to the prospectus pertaining to the issue of the aforesaid bonds and has found that the same are easily transferable by endorsement and delivery. Thus the objection of the authorities below that it was a long-term investment blocking the funds of the assessee for ten years has been found to be without any merit. The Tribunal has further held that the investment in the bonds being in the nature of a specified security under section 20 of the Indian Trusts Act, 1882, is in accordance with the mandatory provisions of section 44 of the Punjab Co-operative Societies Act, 1961. Thus it was held that the case of the assessee was fully covered by the decision of the Supreme Court in CIT v. Kar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of that section which makes it applicable only to income derived from working or circulating capital. Thus the question as to whether investment made in the statutory reserves had come out of working or circulating capital or out of surplus funds is of no consequence. In fact in Mehsana District Central Co-operative Bank Ltd.'s case [2001] 251 ITR 522 also, the apex court has followed its earlier decision in Karnataka State Co-operative Apex Bank's case [2001] 251 ITR 194, in respect of interest earned from the funds utilised for the statutory reserves. The observations of the Supreme Court in Mehsana District Central Co-operative Bank Ltd.'s case [2001] 251 ITR 522, relied upon by counsel for the appellant pertain only to the "voluntary r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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