Cooperative society interest income from deposits with a cooperative bank remains deductible when the statutory exclusion does not apply.

Interest earned by a cooperative society from fixed deposits placed with a cooperative bank was treated as eligible for deduction under section 80P(2)(d) because section 80P remains a beneficial provision for the cooperative sector and section 80P(4) excludes only cooperative banks functioning like commercial banks, not every cooperative society registered under State cooperative law. Applying binding precedent to the facts, the Tribunal's view that the deduction was available was upheld, and the Revenue's challenge was held not to raise any substantial question of law.

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Issues: Whether the assessee was entitled to deduction under section 80P(2)(d) of the Income-tax Act, 1961 in respect of interest earned on fixed deposits placed with a cooperative bank, and whether the Revenue's challenge gave rise to any substantial question of law.

Analysis: The Court followed its earlier binding view that section 80P is a beneficial provision intended to promote the cooperative sector and that sub-section (4) excludes only cooperative banks functioning like commercial banks, not every cooperative society registered under the State cooperative law. On the facts, the interest was earned from deposits with a cooperative bank, and the Tribunal had applied the jurisdictional precedent to hold that such interest remained eligible for deduction under section 80P(2)(d). The Court found that the Tribunal had correctly applied the law and the facts, and that the Revenue's objections did not disclose any error giving rise to a substantial question of law.

Conclusion: The claim for deduction under section 80P(2)(d) was upheld and the Revenue's appeal failed.

Ratio Decidendi: Interest derived by a cooperative society from deposits with a cooperative bank that is itself a cooperative society is eligible for deduction under section 80P(2)(d) unless the statutory exclusion in section 80P(4) applies.

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