Section 80P(2)(d) deduction on interest from co-operative bank deposits restored for fresh adjudication after legal review.

Deduction under section 80P(2)(d) on interest earned from deposits with co-operative banks was examined on identical facts across multiple assessment years, and the Tribunal found that the matter required reconsideration in light of the applicable legal position and the nature of the recipient bank. The earlier denial of the deduction was not finally sustained; instead, the issue was restored to the Assessing Officer for fresh adjudication after de novo examination of the interest income and related treatment. The assessee succeeded only to that limited extent.

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Issues: Whether the disallowance of deduction claimed under section 80P(2)(d) in respect of interest earned from deposits with co-operative banks required to be sustained or the matter was to be restored for fresh adjudication.

Analysis: The appeals involved identical facts across different assessment years. The deduction claimed under section 80P(2)(d) on interest income from investments with co-operative banks had been denied by the Assessing Officer and confirmed in first appeal. Following coordinate bench decisions on substantially similar facts, the Tribunal held that the issue should be examined afresh by the Assessing Officer in the light of the applicable legal position, including the nature of the recipient bank and the treatment of related interest income. The Tribunal therefore set aside the matter for de novo consideration.

Conclusion: The issue was restored to the Assessing Officer for fresh adjudication, and the assessee succeeded only to that extent.

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