Deduction under section 80P(2)(d): interest and dividend from deposits with a cooperative bank held deductible for assessee.

Whether interest and dividend from deposits with a cooperative bank qualify for deduction under section 80P(2)(d) is addressed by applying the view favourable to the assessee where there are conflicting non jurisdictional High Court decisions; a Supreme Court decision relied on below is distinguished on its facts because it turned on a different provision not invoked here. The legal principle applied is that conflicting High Court precedents favouring the taxpayer govern entitlement to deduction, and the conclusion is that the interest and dividend income is deductible under the statutory provision.

---

---

Issues: Whether interest and dividend income earned by an employees' co operative credit society from deposits/investments with a co operative bank qualifies for deduction under section 80P(2)(d) of the Income tax Act, 1961.

Analysis: The appeal examines eligibility for deduction under section 80P(2)(d) in respect of interest/dividend income from a co operative bank. There are conflicting High Court decisions on whether a co operative bank should be treated as a co operative society for the purposes of section 80P(2)(d). In the presence of two conflicting non jurisdictional High Court decisions, the view favourable to the assessee is applied. The Supreme Court decision relied upon by the lower authority is distinguished on facts because that decision turned on applicability of section 80P(4) which is not the basis for denial in the present case.

Conclusion: Deduction under section 80P(2)(d) of the Income tax Act, 1961 is allowable in respect of the interest and dividend income from deposits/investments with the co operative bank; appeal allowed in favour of the assessee.

---