Co-operative bank investment interest may qualify for deduction as business-attributable income of a member-focused credit society.

Interest earned by a co-operative credit society on investments with co-operative banks is described as deductible under Section 80P(2)(a)(i) and/or Section 80P(2)(d) of the Income-tax Act, 1961. The notes state that, where the society provides credit facilities to its members, such interest is attributable to its business and may also qualify as income derived from investments with another co-operative society. The stated position relies on consistent jurisdictional Tribunal treatment and notes no contrary material.

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Issues: Whether interest earned by a co-operative credit society on investments with co-operative banks is deductible under Section 80P(2)(a)(i) or Section 80P(2)(d) of the Income-tax Act, 1961.

Analysis: The undisputed interest income was earned from investments with co-operative banks by a society engaged in providing credit facilities to its members. Jurisdictional Tribunal decisions consistently recognise such interest as attributable to the society's business and eligible for deduction under Section 80P(2)(a)(i) and/or Section 80P(2)(d). No contrary material was produced to displace that settled position.

Conclusion: Interest income earned from investments with co-operative banks is eligible for deduction under Section 80P(2)(a)(i) or Section 80P(2)(d) of the Income-tax Act, 1961; the deduction claimed by the assessee is allowable.

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