M.M.KUMAR, J. - (1.) THIS order shall dispose of ITA Nos. 594, 595 and 596 of 2006 as all the appeals are directed against one common order of the asst. yrs. 1999 -2000, 2000 -01 and 2001 -02. The Revenue has claimed in these appeals filed under s. 260A of the IT Act, 1961 (for brevity "the Act") that the following substantial question of law needs to be determined by this Court : Whether, on the facts and in the circumstances of the case, the Hon'ble Tribunal was right in law in holding that the assessee -bank is entitled to claim deduction under s. 80P(2)(a)(i) in respect of income earned from utilization of its voluntary reserves other than the statutory reserves in HDFC bonds not approved by the RBI and NABARD -
(2.) THE facts are not in dispute. The assessee is a co -operative bank engaged in the business of banking. It has claimed passed under s. 143(3) held that the assessee had earned interest of Rs. 75,00,000 (rupees seventy five lakhs only) in respect of the asst. yr. 1999 -2000 from the investment made in HDFC bonds and after granting deduction of 20 per cent,, as expenditure, the balance income of Rs. 60,00,000 (rupees sixty lakhs only) has been treated as income from "other sources". Accordingly, the same has been taxed.
(3.) ON further appeal filed by the assessee, the Tribunal accepted the contention raised by the assessee by placing reliance on a Division Bench judgment of this Court in the case of CIT vs. Nawanshahar Central Co -operative Bank Ltd. (2004) 186 CTR (P&H) 459 : (2003) 263 ITR 320 (P&H) and also the judgments delivered by the Hon'ble Supreme Court in the cases of CIT vs. Karnataka State Co -operative Apex Bank (2001) 169 CTR (SC) 486 : (2001) 251 ITR 194 (SC) and Mehsana District Central Co -operative Bank Ltd. vs. ITO (2001) 170 CTR (SC) 169 : (2001) 251 ITR 522 (SC). The Tribunal has noticed that learned counsel for the Revenue was not able to controvert the argument raised by counsel for the assessee who had placed reliance on the aforementioned judgments. On the basis of the aforementioned Division Bench judgment of this Court and that of the Hon'ble Supreme Court, the Tribunal has held that the income earned from HDFC bonds was eligible for deduction under s. 80P(2)(a)(i) of the Act. The Tribunal rejected the contention of the Revenue that the income earned from HDFC bonds has to be regarded as income from other sources which was not to qualify for exemption under s. 80P(2)(a)(i) of the Act. Accordingly, direction was issued to the AO to allow the claim of the assessee.;