Co-operative society interest deduction under section 80P(2)(d) allowed for interest from a District Co-operative Bank.

Interest received by a co-operative society from a District Co-operative Bank was held eligible for deduction under section 80P(2)(d), because the Tribunal applied the jurisdictional High Court's view that interest income earned from investments with another co-operative society falls within that provision. The claim could not be denied merely because the income was assessed during scrutiny under sections 143(3) and 144B. On that basis, the deduction was allowed on the interest income from the District Co-operative Bank.

---

---

Issues: Whether interest received by a co-operative society from a District Co-operative Bank is eligible for deduction under section 80P(2)(d) of the Income-tax Act, 1961.

Analysis: The controversy turned on the character of interest income earned by the assessee from the District Co-operative Bank and whether such income fell within the scope of section 80P(2)(d). The Tribunal followed the binding decision of the jurisdictional High Court, which held that interest income derived by a co-operative society from investments with another co-operative society qualifies for the benefit of section 80P(2)(d). Applying that principle, the Tribunal held that the assessee's claim could not be denied merely because the income was assessed in the course of scrutiny under sections 143(3) and 144B.

Conclusion: The issue was decided in favour of the assessee, and the assessee was held entitled to deduction under section 80P(2)(d) on the interest received from the District Co-operative Bank.

Ratio Decidendi: Interest derived by a co-operative society from a District Co-operative Bank, where the bank is treated as a co-operative society for the purpose of section 80P(2)(d), is eligible for deduction under that provision.

---