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. 81 of 2010 Date of Decision: March 30, 2010 Commissioner of Income Tax, Jalandhar Versus …Appellant M/s Shivalik Kshetriya Gramin Bank, Hoshiarpur …Respondent CORAM: HON'BLE MR. JUSTICE M.M. KUMAR HON’BLE MR. JUSTICE JITENDRA CHAUHAN 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 in the Digest? M.M.KUMAR, J. The Revenue has approached this Court under Section 260A of theIncome Tax Act, 1961 (for brevity 'the Act') challenging order dated 3.7.2009 passedby the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (for brevity 'theTribunal') in ITA No. 268(ASR)/2009 in respect of the assessment year 2005-06.The following questions of law have been sought to be raised for determination ofthis Court:- i)Whether the Tribunal was right in law in disallowing the claim of theassessee bank for deduction u/s 80(P) (2)(a)(i) in respect of incomeearned from utilization of its reserve funds being statutory reserves u/s67(2) of the Gujarat Cooperative Societies Act, 1961 ? ii)Whether the assessee bank is entitled to claim deduction underSection 80(P)(2)(a)(i) in respect of income earned from utilization of itsvoluntary reserves other than the statutory reserves mentionedabove ? iii)Whether the Tribunal was right in law in holding that the locker rentis not deductible under Section 80P(2)(a)(i) ? The matter is no longer res integra. This Court in the case ofCommissioner of Income Tax v. Nawanshahar Central Co-operative Bank Ltd., [2003] 263 ITR 320, has held that deduction under Section 80P(2)(a)(i) of the Act, onaccount of interest income on Government securities, debentures, bonds, KisanVikas Patras and C.D. of IDBI was admissible. The investment in the said bonds hasbeen held to be statutory investment in accordance with Section 44 of the PunjabCo-operative Societies Act, 1961 and, thus, eligible for deduction under Section 80P(2)(a)(i) of the Act. The view taken by the Tribunal is in accordance with the abovejudgment of this Court. It is also conceded position that the Special Leave Petitionagainst the aforementioned judgment, has been dismissed by Hon’ble the SupremeCourt. Moreover, a Division Bench of this Court has already dismissed a similarappeal, bearing ITA No. 594 of 2009, on 2.2.2010, which was filed by the appellant-revenue against the assessee-respondent in respect of earlier assessment years2002-03 to 2004-05. Accordingly, this appeal fails and the same is dismissed. (M.M. KUMAR)JUDGE March 30, 2010okg (JITENDRA CHAUHAN) JUDGE