Judgment :- K.Raviraja Pandian, J. By formulating the following two questions of law, the revenue is on appeal against the order of the Income Tax Appellate Tribunal, Madras C Bench, dated 24.03.2003 in ITA.No.1841/(Mds)/94. The relevant assessment year is 1990-91. "1. Whether in the facts and circumstances of the case, the appellate tribunal was right in holding that the assessee was entitled to deduction u/s 80P(2)(a)(i) of the Income Tax Act? 2. Whether in the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in holding the receipt not attributable to the business of the assessee should be included in the business income for computing the allowance u/s 32AB of the Income Tax Act?” .2. The facts as culled out from the statement of facts in the memorandum of grounds of appeal are as follows: - .The assessee is a co.operative society engaged in the business of manufacture and sale of sugar. For the Assessment year 1990-91, the assessee filed its return of income on 310. 1990 admitting an income of Rs.1,37,57,791/- before set-off of earlier years losses. Subsequently, a revised return was filed on 12.03.1991 admitting an income of Rs.1,30,50,840/-. The assessment was completed under section 143(3) on 03.03.1993. While making the assessment, the assessing officer disallowed the assessees claim for deduction u/s 80P(2)(a)(i) of the Income Tax Act in respect of Rs.2,25,770/- being interest received from cane-growers on the ground that the assessee was not engaged in the business of providing credit facilities to its members. The assessee was advancing loans to the growers to procure material or its own business. .3. The assessing officer also reduced the allowance u/s 32AB of the Income Tax Act by excluding from the business income, interest on loans and advances Rs.2,25,770/-, interest on investments Rs.52,147/-, interest on bank deposits Rs.2,20,704/-, previous years income Rs.2,501/-, rent Rs.11,041/-, Diesel bunk control Rs.66,901/- and dividend of Rs.9,036/-. This resulted in a lower allowance u/s 32AB than what was claimed by the assessee. 4. Aggrieved by the order of the Assessing Officer, the assessee filed an appeal before the Commissioner of Income Tax (Appeals), who confirmed the action of the Assessing Officer in denying deduction under Section 80P(2)(a)(i) on the ground that under the said section the assessee will be eligible for reduction only when the chief source of income is from the business of banking or provision of credit facilities. With regard to the retrenchment of the deduction claimed under Section 32AB, the Commissioner of Income Tax (Appeals) did not agree with the contention of the assessee that all the items deducted from the income by the Assessing Officer were part of the business profits of the assesee and partly granted the relief under Section 32AB. 5. Aggrieved by the order of the Commissioner of Income Tax (Appeals), the assessee filed a second appeal before the Income Tax Appellate Tribunal, Chennai Bench. The Tribunal allowed the assessees claim under Section 80P(2)(a)(i) following its order in Madurantakam Co.operative Sugar Mills Ltd made in ITA No.1605/Mds/93 and also the order of this Court in the case of Pondicherry Co.operative Housing Society Limited reported in 188 ITR 671. 6. Regarding the issue of allowance under Section 32AB, the appellate Tribunal granted the relief in favour of the assessee by following the Judgment in the case of CIT vs. Tamilnadu Mercantile Bank Limited reported in 255 ITR 205, held in favour of the assessee. 7. The correctness of the said order is now questioned by the revenue in this appeal by formulating the above questions of law. 8. We have heard the argument of the counsel for the revenue and perused the material. .9. In respect of the first question, the decision relied on by the Tribunal and that of this Court has been taken to the Supreme Court in a batch of appeals. The Supreme Court in the case of Commissioner of Income Tax vs. Ponni Sugars and Chemicals Limited reported in 306 ITR 392 has found as follows: - ."With regard to the question whether the assessee was entitled to exemption under Section 80P(2)(a)(i) of the Income Tax Act, 1961, in respect of interest received from the members of the society, we find that none of the authorities below, including the High Court, have examined the memorandum of association filed by Salem Co.operative Sugar Mills Ltd., Madurantakam Co.operative Sugar Mills Ltd., Ambur Co.operative Sugar Mills Ltd., Dharmapuri District Co.operative Sugar Mills Ltd., Vellore Co.operative Sugar Mills Ltd., Attur Agricultural Producers Co.operative Society Ltd., and Modern Engineers Constructions Co.operative Society Ltd. Under Section 80P(1), deduction in respect of income of co.operative societies is provided for. Under Section 80P(1), where the gross total income of a co.operative society includes any income referred to in sub-section (2) then the sums specified in sub-section (2) shall be deducted from the gross total income to arrive at the total income of the assessee society. In order to earn exemption under section 80P(2) a co.operative society must prove that it had engaged itself in carrying on any of the several businesses referred to in sub-section (2). In that connection, it is important to note that under sub-section (2), in the context of co.operative society, Parliament has stipulated that the society must be engaged in carrying on the business of banking or providing credit facilities to its members. Therefore, in each case, the Tribunal was required to examine the memorandum of association, the articles of association, the return of income filed with the department, the status of business indicated in such returns etc. This exercise had not been undertaken at all". 10. By observing so, after setting aside the Judgment of this Court, the Supreme Court remitted the matter back to the Tribunal for de nova consideration in accordance with the observations made by the Supreme Court, in order to grant exemption under section 80P(2)(a)(i). .11. In the case on hand also, these details are not available and it is apparent from the order of the Tribunal, the Tribunal has followed the earlier case cited by the Supreme Court. Hence, for the purpose of deciding the question of law referred to above, we are of the opinion that the exercise indicated by the Supreme Court has to be done by the Tribunal. Hence the order of the Tribunal in respect of that question of law is hereby set aside. The matter is remitted back to the Tribunal for re-consideration as per the direction of the Supreme Court in the case of Ponni Sugars reported in 306 ITR 392. 12. Hence the order of the Tribunal in respect of that question of law is hereby set aside. The matter is remitted back to the Tribunal for re-consideration as per the direction of the Supreme Court in the case of Ponni Sugars reported in 306 ITR 392. 12. In respect of the second question of law, the issue is squarely covered by the decision of this Court in the case of Commissioner of Income Tax vs. Tamil Nadu Mercantile Bank Limited reported in 255 ITR 205, wherein the question of law taken up for consideration was as to whether in the facts and circumstances of the case the Tribunal is correct in law in holding that the deduction under Section 32AB of the Income Tax Act, 1961, is to be allowed at 20 per cent of the book profit of the undertaking as a whole computed in accordance with Schedule VI of the Companies Act, and not on the business income computed as per the provisions of the Income Tax Act?. 12. The Division Bench of this Court after consider the entire provisions of Section 32AB has ultimately held as follows:- "Section 32AB provides a benefit to the assessee. The benefit so provided is an incentive to an assessee, who deposits any amount in a development bank before the expiry of six months from the end of the previous year or before furnishing the return of his income, whichever is earlier. That incentive is also available if the assessee utilises any amount during the previous year for the purchase of any new ship, new aircraft, new machinery or plant, without depositing any amount in the deposit account with a development bank. The benefit is given by way of deduction, such deduction being allowed before the loss, if any, brought forward from earlier years, is set off under Section 72 of ............... The manner in which the profits of the business should be computed is dealt with in sub-section (3), which, as noticed earlier, requires computation to be in accordance with the requirement of Parts II and III of Schedule VI to the Companies Act. The computation so made is to be increased by the aggregate of the amounts set out in subclauses (i) to (vii) therein. The computation so made is to be increased by the aggregate of the amounts set out in subclauses (i) to (vii) therein. It is thereafter to be reduced by any amount or amounts withdrawn from reserves or provisions if such amounts are credited to the profit and loss account. It is thus amply clear that it is the computation made in accordance with subsection (3) of section 32AB, which is to be the basis for determining the twenty per cent of the profits of the business for the purpose of section 32AB(1)(ii). The computation of income under the provisions of the Income Tax Act is of no relevance for the purpose of determining the extent of benefit under Section 32AB(1) or (2). The computation under the Income Tax Act is relevant after the ascertainment of the amount of the deposit and the twenty per cent of the profits of the business calculated in accordance with section 32AB(3), and the amount to be allowed in the computation under the Income Tax Act is the lower of the two figures and the deduction is to be allowed in the manner provided in section 32AB(1) of the Act". 13. In the case of Carborandum Universal Limited vs. Commissioner of Income Tax reported in 265 ITR 372, the Division Bench of this Court, having regard to the nature of the relief granted under Section 32AB and having regard to the language employed in the section has observed as follows:- "The calculations required to be made for the purpose of Section 32AB of the Income Tax Act, 1961, are to commence with the figure representing the profits of the eligible business as computed in accordance with the requirements of Parts II and III of Schedule VI to the Companies Act, 1956. From that figure the amount equal to the depreciation computed in accordance with section 32(1) of the Income Tax Act, 1961, is to be deducted. After such deduction, that amount is to be increased by the aggregate of the amounts set out in clauses (i) to (vii) of section 32(3). A sum equal to 20% of that amount is to be allowed as a deduction under Section 32AB(1)(ii). After such deduction, that amount is to be increased by the aggregate of the amounts set out in clauses (i) to (vii) of section 32(3). A sum equal to 20% of that amount is to be allowed as a deduction under Section 32AB(1)(ii). The determination of the profit required to be made in accordance with Parts II and III of Schedule VI to the Companies Act is required to be made after taking into account all the activities of the assessee governed by the Companies Act, as the profit and loss account required to be drawn up by a company must necessarily reflect all the income and all the expenditure incurred by the company in that year. Section 32AB does not require the profit for the purpose of section 32AB(1) to be calculated in accordance with the provisions of the Income Tax Act. All that it provides is that the calculations should first be made in accordance with the Companies Act and the requirements more specifically required of Parts II and III of Schedule VI to the Companies Act. There is, therefore, no scope at all for importing the concept of different heads of income found in the Income Tax Act, into the calculation of profit required to be made". 14. In view of the consistent view taken by the Division Bench of this Court, which is in favour of the assessee, we are of the view that the Tribunal has rightly held the issue in favour of the assessee and the question of law has to be answered in affirmative in favour of the assessee and as such answered. The appeal is disposed of with the above observations No costs.