Deduction for interest from cooperative banks under section 80P(2)(d) upheld for a cooperative housing society.

Interest income earned by a cooperative housing society from deposits and investments with cooperative banks was held to qualify for deduction under section 80P(2)(d) of the Income-tax Act, 1961. The Tribunal followed its coordinate bench rulings that cooperative banks are treated as cooperative societies for this purpose, so interest received from such investments falls within the deduction provision. On that basis, the disallowance was deleted in favour of the assessee.

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Issues: Whether interest income earned by a cooperative housing society from deposits and investments with cooperative banks is eligible for deduction under section 80P(2)(d) of the Income-tax Act, 1961.

Analysis: The assessee had earned interest income from investments with cooperative banks and claimed deduction under section 80P(2)(d). The Tribunal followed its earlier coordinate bench decisions holding that cooperative banks are treated as cooperative societies for the purpose of this provision, and therefore interest received from such investments qualifies for deduction. The revenue did not effectively dispute this position.

Conclusion: The interest income from cooperative banks is eligible for deduction under section 80P(2)(d) of the Income-tax Act, 1961, and the disallowance was set aside in favour of the assessee.

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