Income-tax--

----Cooperative society---Special deduction---Interest on securities. subsidies received from Government and dividends received---Entitled to special deduction---Indian Income Tax Act, 1961, S.80-P.

Held, (i) that the assessee was entitled to deduction of interest on securities and subsidies received from the Government under section 80-P(2)(a)(i) of the Indian Income Tax Act, .1961.

CIT v. Madurai District Central Cooperative Bank Ltd. (1984) 148 ITR 196 (Mad.) fol. .

(ii) that the assessee was entitled to deduction with regard to the dividend received.

CIT v. Ramanathapuram District Central Cooperative Bank Ltd. (1997) 224 ITR 226 (Mad.) fol.

C.V. Rajan for the Commissioner. .

P.P.S. Janarthana Raja for the Assessee.

JUDGMENT

THANIKKACHALAM, J. ---At the instance of the Department, the Tribunal referred the following question for the opinion of this Court under section 256(1) of the Income Tax Act, 1961.

"Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that; (i) interest on securities, (ii) subsidies received from the Government, and (iii) dividends received by the assessee, were business income of the assessee entitled to deduction under section 80-P(2)(a)(i) of the Income Tax Act, 1961?"

The point for consideration is whether interest on securities, subsidies received from the Government and dividends received by the assessee were business income entitled to deduction under section 80-P(2) (a)(i) of the Income Tax Act, 1961.

So far as deduction claimed under items Nos.(i) and (ii) are concerned, namely, interest on securities and subsidies received, the deduction of the same came up for consideration before this Court in the case of the same assessee for the assessment years 1970-71 to 1993-74, wherein this Court in CIT v. Madurai District Central Cooperative Bank Ltd. (1984) 148 ITR 196 held that the assessee is entitled to deduction of interest on securities and subsidies received from the Government under section 80-P(2)(a)(i) of the Income Tax Act, 1961. In so far as item No.(iii), namely, the dividend received by the assessee is concerned, it came up for consideration before this Court in Tax Cases Nos. 1 153 and 1154 of 1982 in the case of CIT v. Ramanathapuram District Central Cooperative Bank Ltd. (1997) 224 ITR 226, wherein by a judgment, dated January 10, 1996, this Court held that the assessee is entitled to deduction with regard to dividend received by the assessee under section 80-P(2)(a)(i) of the Act. In view of the decisions cited (supra), we answer the question referred to us in respect of all the three items in the affirmative and against the Department. No costs.

M.B.A./1415/FC Order accordingly.