Co-operative society interest from co-operative bank investments remains deductible under section 80P(2)(d), despite section 80P(4).

Interest earned by a co-operative housing society from investments with co-operative banks is deductible under section 80P(2)(d) of the Income-tax Act, 1961. The provision applies to income by way of interest or dividends derived by a co-operative society from investments with another co-operative society, and section 80P(4) does not deny that deduction where the claimant is not itself a co-operative bank. The issue is treated as covered by coordinate bench precedent, confirming that such interest income remains eligible for deduction in favour of the assessee.

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Issues: Whether interest earned by a co-operative housing society from investments made with co-operative banks is eligible for deduction under section 80P(2)(d) of the Income-tax Act, 1961.

Analysis: The assessee was a co-operative society and the interest income in question arose from investments with co-operative banks. The governing provision allows deduction of income by way of interest or dividends derived by a co-operative society from its investments with any other co-operative society. The exclusion in section 80P(4) is relevant where the claimant is a co-operative bank and does not take away the entitlement of a co-operative society claiming deduction on interest earned from investments with co-operative banks. The issue was treated as covered by the coordinate bench decision relied upon by the assessee.

Conclusion: The interest income from investments with co-operative banks is deductible under section 80P(2)(d), and the claim is allowed in favour of the assessee.

Ratio Decidendi: Interest earned by a co-operative society from investments with co-operative banks qualifies for deduction under section 80P(2)(d) of the Income-tax Act, 1961, and section 80P(4) does not defeat that claim.

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