TMI Blog1994 (2) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... ances of the case, the Tribunal was legally justified in holding that the shares of the Agricultural Refinance Corporation and the Unit Trust of India are held by the assessee-bank as its stock-in-trade? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in holding that the income earned in respect of the shares of the Agricultural Refinance Corporation and the Unit Trust of India is income from business carried on by the assessee and is exempt under section 80P(2) of the Income-tax Act, 1961 ?" The respondent-assessee is a co-operative society giving long-term finance to primary banks, co-operative farming societies, cultivators and land development banks on security by way of simple mortg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business carried on by the assessee or that the holding is a business asset. In the ultimate analysis, the Commissioner held that the assessee was statutorily duty bound to make the investment and the shareholding as well as the investment in the Unit Trust of India was incidental to the business and the same had been made to safeguard the business itself. On these reasonings he further recorded a finding that the income in question received or accrued to the appellant was the income from business and the same was exempt from tax under section 80P(2) of the Act, like the other income of the co-operative society. This view of the Commissioner of Income-tax (Appeals) was upheld by the Tribunal. The applications for reference moved under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned by the assessee. Whether such interest is exempt was dealt with by the Supreme Court in CIT v. Bombay State Co-operative Bank Ltd. [1968] 70 ITR 86. It was held that the interest received from Government securities held by a co-operative society as its stock-in-trade qualifies for exemption. In our opinion, no statable question of law arises on the facts found by the Tribunal. The application is accordingly rejected." The decision of this court referred to above was followed by this court in Income-tax Application No. 131 of 1983-CIT v. Zila Sahakari Bank Ltd.-decided on March 29, 1984, when an application under section 256(2) of the Act was rejected on a similar issue. It appears that the Revenue filed a special leave petition be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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