Commissioner Of Income Tax, ... vs Karnataka State Cooperative Apex Bank

The Supreme Court addressed the interpretation of Section 80-P of the Income Tax Act, 1961, determining that interest income from investments made out of a cooperative bank's reserve fund does not qualify for exemption under this section. The Court held that such investments do not constitute circulating capital or stock-in-trade, as they are not readily available for use in the bank's operations. The judgment clarified the distinction between the nature of investments and their role in banking activities, ultimately ruling against the exemption claim.