JUDGMENT SWATANTER KUMAR, J. 1. The present appeal is directed under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act) against the Order of the Income Tax Appellate Tribunal, Panaji Bench, Panaji, dated 30.11.2004. While admitting the present appeal, the Division Bench passed an order dated 18.7.2005 and framed the following questions of law which read as under:- (a) Whether on the facts and in the circumstances of the case, the ITAT was right in law in holding that the assessee is entitled to claim deduction under Section 80(P)(2)(a)(i) of IT Act, in respect of proportionate interest income derived on investments in Government securities in excess of SLR requirement out of reserve fund? (b) Whether on the facts and in the circumstances of the case, the proportionate interest income derived by the assessee from the investment in SLR securities out of reserve Fund, is attributable to business of banking and the assessee is eligible to claim deduction under Section 80(P)(2)(a)(i) of the Act? 2. The facts are hardly in controversy. The investment by the Assessee Bank is in excess of statutory liquidity ratio i.e. 25% of demand and liabilities in terms of Section 24 of the Banking Regulation Act. However, the excess investment made in SLR securities were subjected to taxation by the Assessing Officer vide his Order dated 24.2.1999 which was upheld in appeal by the Commissioner of Income Tax (Appeals). It was felt by the authorities that the income from any investments coming out of SLR would be entitled to deduction under Section 80(P)(2)(a)(i) in terms of the judgment of the Supreme Court in M.P. Co-operative Bank Ltd. vs. Additional CIT, 218 ITR 438, only if it was income from the banking business. These amount had been invested in approved securities by the Assessee Bank i.e. the Central Bank and other trust securities. Noticing that the object of Section 80(P)(2)(a)(i) was to encourage co-operative movement in the country and any income of the society from the investment which does not form part of the circulating capital or working capital or stock-in-trade of the banking business cannot be said to be the profits and gains a attributable to the business of banking and entitled to deduction under Section 80(P)(2)(a)(i), on these reasonings. the Commissioner declined to interfere• in the appeal. the Commissioner declined to interfere• in the appeal. The Income Tax Appellate Tribunal while upholding both these orders whilst referring to the judgment of the Gujarat High Court in the case of Commissioner of Income Tax vs. Baroda Peoples Co-operative Bank Ltd. (2006) 280 ITR 282, followed the principle while referring to the Special Bench Judgment of the Ahmedabad High Court in the case of Surat District Co-operative Bank Ltd. (2003) 262 ITR (AT) 1 and held as under:- "In this case, it was held by the Special Bench of the Tribunal that the interest income on investment in Government securities, fixed deposits, KVPs and IVPs, investments with the Unit Trust of India etc. out of surplus/idle money available from working capital including voluntary reserves excess collection of interest-tax and locker rent are all income attributable to business of banking and are eligible for grant of deduction under Section 80(P)(2)(a)(i) of the Act. Respectfully following the decision of the Special Bench of the Tribunal, we allow the appeal of the assessee. In the result, the appeal filed by the assessee is allowed." 3. The learned Counsel appearing for the department has relied upon the judgment of the Division Bench of the Bombay High Court in the case of C.I.T. vs. Ratnagiri District Central Co-operative Bank Ltd. (2002) Volume 254 ITR 697, to contend that this deduction was not permissible. We are not inclined to accept this submission primarily in view of what is held in the case of C.I.T. vs. Ratnagiri District Central Co-operative Bank Ltd. (supra) as the issues are no way different. In fact in that case while referring to the Judgment of the Supreme Court in the case of Bihar State Co-operative Bank Ltd. vs. C.I.T., (1960) 39 ITR 114, where the Apex Court clearly held that short-term deposits by the d bank was income from normal banking business and was, therefore, exempt from the liability to pay income-tax. It was further specifically held in that case that since the society in that case was engaged in banking activity, its normal business was to deal in money and credit and. therefore, the money laid out in the form of short-term deposit did not cease to be a circulating capital and interest earned thereon could not be other than income generated from the business of banking and was therefore exempt from tax. therefore, the money laid out in the form of short-term deposit did not cease to be a circulating capital and interest earned thereon could not be other than income generated from the business of banking and was therefore exempt from tax. In the present case, the investments have been made by the Bank in Government securities, fixed deposits etc. and the income is utilized for business. There is nothing on record to show that this case of the assessee is not acceptable in view of the law clearly stated by the Bench of this Court for which we have no reasons to disagree. We dismiss the appeal while answering the questions in favour of the assessee. By this order, we dispose of the appeal with reference to the facts of the case. Appeal dismissed.