Co-operative bank deposit interest qualifies for co-operative society deduction despite the exclusion applicable to co-operative banks themselves.

Interest or dividend income derived by a co-operative society from investments with another co-operative society qualifies for deduction under section 80P(2)(d). The exclusion of co-operative banks from section 80P benefits under section 80P(4) does not change their status as co-operative societies when an investing co-operative society claims deduction under section 80P(2)(d). Where non-jurisdictional High Court decisions conflict, the interpretation favourable to the assessee is preferred. Accordingly, interest earned on deposits or investments with co-operative banks is eligible for deduction under section 80P(2)(d).

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Issues: Whether a co-operative society is entitled to deduction of interest income earned on deposits or investments with co-operative banks under section 80P(2)(d).

Analysis: Section 80P(2)(d) permits deduction of interest or dividend income derived by a co-operative society from investments with another co-operative society. Although section 80P(4) withdraws the benefit of section 80P from co-operative banks themselves, it does not alter the character of a co-operative bank as a co-operative society for the purpose of an investing co-operative society's claim under section 80P(2)(d). Where non-jurisdictional High Court views conflict, the view favourable to the assessee was preferred.

Conclusion: Interest income earned by the assessee co-operative society from investments or deposits with co-operative banks qualifies for deduction under section 80P(2)(d), in favour of the assessee.

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