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Section 80P of the Income-tax Act, 1961 - Deductions - Income of co-operative societies - Assessment year 1998-99 - Whether a co-operative bank is entitled to deduction under section 80P in respect of interest and dividend earned by it out of investment made by it in other banking institutions - Held, yes CASE REFERRED TO CIT v. Sri Ram Sahakari Bank Ltd. [2004] 138 Taxman 45 (Kar.) [Para 4]. Smt. Madhumita Bagchi for the Appellant. JUDGMENT P. Vishwanatha Shetty, J. - In this appeal, filed under section 260A of the Income-tax Act, 1961 (hereinafter referred to as 'the Act'), the appellant has called in question the correctness of the order dated 18th December, 2002, made in ITA No. 1008/Bang/2002 by the Tribunal, Bangalore, reversing the order dated 12th April, 2002, passed by the CIT(A), Hubli. The only question that arises for our consideration in this appeal is as to whether the respondent co-operative bank is entitled for deduction under section 80P(2)(a)(i ) of the Act in respect of the interest and dividend income earned by it out of the investment made by it in other banking institutions. It is not in dispute that the respondent is a co-operative bank. 2. In this case, the assessment is of the year 1998-99. The Tribunal on consideration of the material on record has taken the view that the respondent-bank is entitled for deduction under section 80P(2)(a)( i) of the Act in respect of the interest and dividend earned by it out of the investment made by it in other banking institutions. 3. However, Smt. Madhumita Bagchi, learned counsel appearing for the appellant, challenging the correctness of the impugned order submitted that the finding recorded by the Tribunal is erroneous in law. 4. In our view, there is no merit in the submission made by Smt. Bagchi. The Division Bench of this Court in the case of CIT v. Sri Ram Sahakari Bank Ltd. [2004] 138 Taxman 45 while considering the similar question has taken the view that a co-operative society carrying on banking business is entitled for deduction under section 80P(2)(a)(i ) of the Act in respect of the interest and dividend earned by it out of the investment made by it in other banking institutions. It is…

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