IN THE HIGH COURT OF JUDICATURE AT PATNA MA No.455 of 2005 1. COMMISSIONER OF INCOME TAX – 1, PATNA 2. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, PATNA……………………………… APPELLANTS Versus BIHAR STATE CO-OPERATIVE BANK LTD, ASHOK RAJPATH, P.O. BANKIPUR, PATNA ( A/Y 2001-2002)… RESPONDENT ----------- 7 06-01-2011 Heard learned counsel for the appellants Mrs. Archana Sinha. Nobody appears on behalf of the assessee. Learned counsel for the appellants has fairly submitted that the dispute between the revenue and the assessee is mainly on two issues and the dispute has covered more than one assessment year leading to several cases including one Misc. Appeal 225 of 2002 relating to assessment years 1996-97 which has been decided on merit by a Division Bench of this Court on 9th September, 2009 in favour of the stand of the assessee bank and against the revenue. A perusal of the aforesaid judgment dated 9th September, 2009 in Misc.Appeal No. 225 of 2002 discloses that the said appeal related to assessment years 1996-97. The appeal was admitted on the two substantial questions of law which are as follows :- (1) “ Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is justified in 2 holding that rental income of Rs.12,21,698/- from house property does not qualify for deduction u/s 80 P of the I.T. Act as banking business income”? (2) “Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal is justified in holding that the interest income of Rs.14,23,316/- earned on investment of reserve fund is not derived from regular banking business of the appellant and does not qualify deduction u/s 80 P of I.T. Act” ? The judgment further discloses that the first question of law was decided in favour of the assessee on the basis of a judgment of the Supreme Court in Commissioner of Income Tax Vrs. Karnataka State Co-operative Apex Bank, reported in 2001 V. 251 ITR 194 (SC). On the basis of said judgment of the Supreme Court it was held that the assessed income derived by way of interest on its compulsory deposit in Government Securities to the extent of 35% of its reserved deposit qualified for exemption from payment of income tax. So far as the second question of law or issue is concerned, that was also decided in favour of the assessee relying upon a Division Bench Judgment of Karnataka High Court in Commissioner of Income Tax Vrs. Grain Merchant Co-operative Bank Ltd. reported in (2004) 267 I.T.R. 742 and on another Division Bench Judgment of Gujrat High Court in Gujrat State Co-operative Bank Ltd. Vrs. 3 Commissioner Income Tax, reported in (2001 ) 251 I.T.R.522. After deciding both the issues in favour of the assessee the order under appeal passed by the Income Tax Appellate Tribunal was set aside with necessary direction. In the present appeal preferred by the Income Tax Department admittedly the issues are similar which have already been decided by the Division Bench of this Court noticed above. In that view of the matter, this appeal preferred by the Reveue has to be dismissed. It is, accordingly, dismissed. Naresh ( Shiva Kirti Singh, J.) ( Dr. Ravi Ranjan, J)