Commissioner Of Income Tax, Jalandhar v. M/S Shivalik Kshetriya Gramin Bank, Hoshiarpur

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. ITA No. 594 of 2009 Date of Decision: February 2, 2010 Commissioner of Income Tax, Jalandhar …Appellant Versus M/s Shivalik Kshetriya Gramin Bank, Hoshiarpur …Respondent CORAM:HON'BLE MR. JUSTICE M.M. KUMAR HON’BLE MR. JUSTICE AJAY TEWARI Present:Mr. Vivek Sethi, Advocate, for the appellant-revenue. 1.To be referred to the Reporters or not?2.Whether the judgment should be reported inthe Digest?2.Whether the judgment should be reported inthe Digest? M.M. KUMAR, J. By this order we propose to dispose of ITA Nos. 594, 595 and 596of 2009 because the same have been filed under Section 260A of the Income-tax Act, 1961 (for brevity, ‘the Act’) against the common order dated 16.4.2009,passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (forbrevity, ‘the Tribunal’) in ITA Nos. 107 to 109 (ASR)/2009, in respect of As-sessment Years 2002-03 to 2004-05. The following questions of law have beensought to be raised for determination of this Court:- “(i)Whether the Tribunal was right in dismissing the appeal ofthe revenue on the issue of disallowance of deduction underSection 80P on interest earned on investment of surplus re-serve where such investment is not governed by any statutoryprovisions for carrying on the business of Banking?the revenue on the issue of disallowance of deduction underSection 80P on interest earned on investment of surplus re-serve where such investment is not governed by any statutoryprovisions for carrying on the business of Banking? (ii)Whether the Tribunal was right in dismissing the appeal ofthe revenue on the issue of disallowance of deduction underSection 80P on interest earned from utilisation of voluntarythe revenue on the issue of disallowance of deduction underSection 80P on interest earned from utilisation of voluntary reserves other than statutory reserves when Hon’ble the Su-preme Court has set aside the similar issue to the file of CIT(A) in the case of Mehsana District Co-op Bank Ltd. v. ITO,251 ITR 522?” The matter is no longer res integra. This Court in the case of Commissioner of Income Taxv. Nawanshahar Central Co-operative Bank Ltd., [2003] 263 ITR 320, has held that deduction under Section 80P(2)(a)(i) ofthe Act, on account of interest income on Government securities, debentures,bonds, Kisan Vikas Patras and C.D. of IDBI was admissible. The investment inthe said bonds has been held to be statutory investment in accordance with Sec-tion 44 of the Punjab Co-operative Societies Act, 1961 and, thus, eligible fordeduction under Section 80P(2)(a)(i) of the Act. The view taken by the Tribu-nal is in accordance with the above judgment of this Court. It is also concededposition that the Special Leave Petition against the aforementioned judgment ofthis Court, has been dismissed by Hon’ble the Supreme Court. Moreover, a Di-vision Bench of this Court has already dismissed a similar appeal, bearing ITANo. 314 of 2005, on 1.8.2006, which was filed by the appellant-revenue againstthe assessee-respondent. Accordingly, these appeals fails and the same are dis-missed. A photocopy of this order be placed on the files of all the con-nected appeals. (M.M. KUMAR)JUDGE February 2, 2010 (AJAY TEWARI)JUDGE Pkapoor