Held, dismissing the appeal, that interest arising from investment made, in compliance with the statutory provisions to enable the co-operative society to carry on banking business, out of reserve fund by such society engaged in banking business, is exempt under section 80P(2)(a)(i) of the Act. Further, the placement of such funds being imperative for the purpose of carrying on banking business the income therefrom would be income from the assessee’s business. Therefore, the assessee was entitled to deduction under section 80P(2)(a)(i) of the Act in respect of interest earned from funds utilised for such statutory reserves.(AY.2004-05)