Co-operative bank deposits qualify for section 80P(2)(d) deduction when the bank is registered as a co-operative society.

Interest income earned from deposits placed with a co-operative bank registered as a co-operative society was treated as eligible for deduction under section 80P(2)(d) of the Income-tax Act, 1961. The Tribunal followed binding jurisdictional precedent and the assessee's own earlier years to hold that such a co-operative bank retains the character of a co-operative society for this provision, and the bank's registration as a co-operative central bank supported that conclusion. No contrary legal distinction was accepted, so the disallowance was reversed and the deduction claim succeeded.

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Issues: Whether interest income received from investments with a co-operative bank registered as a co-operative society is eligible for deduction under section 80P(2)(d) of the Income-tax Act, 1961.

Analysis: The assessment disallowed the claim on the footing that interest from a co-operative bank was not interest from another co-operative society. The appellate authority and the Tribunal relied on binding jurisdictional precedent and the assessee's own earlier years to hold that a co-operative bank registered under the State Co-operative Societies Act retains the character of a co-operative society for the purpose of section 80P(2)(d). The Tribunal further noted that the bank's registration as a co-operative central bank supported the conclusion that the interest earned on such deposits fell within the statutory expression used in section 80P(2)(d). The issue was treated as covered by precedent and no contrary legal distinction was accepted.

Conclusion: The interest income from deposits with the co-operative bank was held eligible for deduction under section 80P(2)(d), and the assessee succeeded on the issue.

Ratio Decidendi: A co-operative bank that is registered as a co-operative society under the relevant co-operative societies law is to be treated as a co-operative society for the purpose of section 80P(2)(d) of the Income-tax Act, 1961, and interest income earned from deposits with such entity is deductible.

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