Co-operative housing society interest from co-operative bank deposits remains eligible for deduction under section 80P(2)(d).

Interest earned by a co-operative housing society from fixed deposits and savings accounts with co-operative banks was treated as eligible for deduction under section 80P(2)(d). The analysis states that this provision covers interest or dividend income from investments made with any other co-operative society, and that section 80P(4), which excludes co-operative banks from claiming deduction, does not control a claim made by a co-operative housing society under section 80P(2)(d). The distinction between co-operative banks and co-operative societies was central, and interest from co-operative bank deposits was viewed as within the scope of the deduction.

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Issues: Whether interest income earned by a co-operative housing society from fixed deposits and savings accounts maintained with co-operative banks is eligible for deduction under section 80P(2)(d) of the Income-tax Act, 1961.

Analysis: The deduction under section 80P(2)(d) applies where a co-operative society earns interest or dividend income from investments made with any other co-operative society. The assessee was a co-operative housing society registered under the Maharashtra Co-operative Societies Act, 1960, and the interest in question arose from deposits kept with co-operative banks. The exclusion in section 80P(4) applies to co-operative banks claiming deduction under section 80P and does not control a claim made by a co-operative housing society under section 80P(2)(d). The interpretation was supported by the distinction between co-operative banks and co-operative societies, and by the settled view that interest derived from investments with co-operative banks remains within the scope of section 80P(2)(d).

Conclusion: The deduction under section 80P(2)(d) was allowable, and the Revenue's challenge failed.

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