The assessees were primary agricultural co-operative societies. Some of them claimed deduction on interest from statutory reserves which was denied. Some of them claimed exemption on the ground of mutuality. This was denied by the Assessing Officer. On writ petitions the Court held that   the Assessing Officer rejected the submissions cursorily stating in a single line that ”statutory reserve can also be considered as surplus funds of the assessee”. The judgment of the Supreme Court in the case of CIT v. Nawanshahar Central Co-Operative Bank Ltd ( 2007 289 ITR 6 (SC) had not been considered or discussed and neither had the plea of the assessees for netting of interest paid and earned. Mere reliance on a judgment without reference to the facts involved in the cases, those in the case relied upon and those in the case of the assessee in question, would not justify the conclusion arrived at. The orders rejecting the claim for special deduction of interest on statutory reserve were not valid. As regards  to the claim of the assessees for exemption by application of the principle of mutuality and its rejection  there were cases of other identically placed agricultural co-operative marketing societies that the Department had carried or intended to carry to the Supreme Court. The questions of law would be decided in those cases. Since the questions of law in this regard were still at large, the assessees had to file a statutory appeal before the CIT (A).