Section 80P deduction depends on whether interest comes from a co-operative society, not a co-operative bank.

Deduction under section 80P(2)(d) is available only for interest derived from deposits or investments with a co-operative society, while section 80P(4) excludes a co-operative bank from the deduction regime. The distinction depends on whether the recipient entity is in fact a co-operative society or has become a co-operative bank by carrying on banking business within the banking law framework. Where the nature of the deposit recipient is not conclusively established, the claim cannot be allowed without verification. The matter is therefore to be examined on facts to determine the recipient's status before deduction is granted.

---

---

Issues: Whether interest income earned from deposits placed with banks is eligible for deduction under section 80P(2)(d), and whether the matter required verification of whether the recipient entity was a co-operative society or a co-operative bank.

Analysis: The statutory scheme of section 80P distinguishes between a co-operative society and a co-operative bank. Deduction under section 80P(2)(d) is available in respect of interest derived from investments with a co-operative society, while section 80P(4) excludes a co-operative bank from the deduction regime. The relevant banking law provisions indicate that a co-operative society becomes a co-operative bank only when it carries on banking business within the meaning of the banking statute and the regulatory framework governing co-operative banks. On the facts available, the nature of the deposit recipient was not conclusively established, and the record did not show that the assessee had demonstrated that the interest was received only from a co-operative society and not from a co-operative bank.

Conclusion: The issue was sent back to the Assessing Officer to verify the nature of the deposit recipient and to allow deduction only if the interest was shown to have arisen from deposits with a co-operative society; otherwise, the claim under section 80P(2)(d) would not be available.

Ratio Decidendi: Deduction under section 80P(2)(d) depends on the recipient of interest being a co-operative society, and an entity carrying on banking business as a co-operative bank falls outside the deduction by virtue of section 80P(4).

---