COMMISSIONER OF INCOME TAX Vs. KANGRA CO-OPERATIVE BANK LTD.

JUDGEMENT

(1.) THIS appeal has been admitted on the following question of law: Whether on the facts and circumstances of the case the ITAT was right in law in holding that the interest income earned by the assessee on deposits made with H.P. State Co -operative Bank in the shape of F.D.Rs. is income derived from Banking business and therefore eligible for deduction under Section 80p(2)(a)(i) of the Income Tax Act?

(2.) THE brief facts necessary for decision of the case are that the assessee is a Co -operative Bank created under the H.P. Co -operative Societies Act, 1968. Section 57 of the Act reads as follows: 57. Reserve funds:

(3.) THERE is no dispute that the assessee has invested the amount available in the reserve fund in the H.P. State Co -operative Bank which is also a Co -operative Society.