Section 80P deduction denied on interest from co-operative bank deposits, as co-operative banks are excluded from the provision's benefit.

Interest earned by a co-operative society from deposits with a co-operative bank does not qualify for deduction under section 80P(2)(d) because a co-operative bank, though organised as a co-operative society, is engaged in banking business and is excluded from the benefit of section 80P by section 80P(4), save for limited statutory exceptions. On that construction, a co-operative bank cannot be treated as "any other co-operative society" for section 80P(2)(d). Interest from deposits with a commercial bank also falls outside the deduction. The authorities cited by the assessee were distinguished on the basis that they did not decide the effect of section 80P(4) in the same context.

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Issues: Whether interest income earned by a co-operative society from deposits/investments with a co-operative bank or commercial bank qualifies for deduction under section 80P(2)(d) of the Income-tax Act, 1961, and whether a co-operative bank can be treated as "any other co-operative society" for that purpose.

Analysis: Section 80P(2)(d) allows deduction only for interest or dividend derived by a co-operative society from investments with another co-operative society. The Tribunal held that a co-operative bank, though structured as a co-operative society, carries on banking business regulated by the Banking Regulation Act, 1949 and is distinct from a society not engaged in banking. Reading section 80P as a whole, and especially in light of section 80P(4), the legislative intent is to exclude co-operative banks from the benefit of section 80P except in the limited statutory exceptions. The authorities relied upon by the assessee were distinguished because the present controversy involved the effect of section 80P(4) and the character of the recipient bank, whereas the cited decision did not decide that point in the same setting.

Conclusion: The interest income from deposits with the Tripura State Co-operative Bank and the commercial bank was not eligible for deduction under section 80P(2)(d); the disallowance was upheld.

Ratio Decidendi: For section 80P(2)(d), a co-operative bank cannot be treated as "any other co-operative society" where section 80P(4) excludes co-operative banks from the benefit of section 80P, and interest from such deposits is not deductible.

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