Co-operative bank interest is not deductible under Section 80P(2)(d); remand on income head upheld absent perversity.

Interest earned from deposits placed in a co-operative bank was held not deductible under Section 80P(2)(d) because Section 80P(4) bars such relief once the recipient is a co-operative bank carrying on banking business. The Court followed its earlier view and rejected the deduction claim on that issue. On the question whether interest income from investments was attributable to the appellant's business for deduction under Section 80P(2)(a)(i), the Tribunal's remand to the Assessing Officer was found to disclose no perversity or fundamental error, and interference was refused. Both substantial questions were answered against the appellant and the appeals were dismissed.

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Issues: (i) Whether interest income earned from investments was attributable to the appellant's business so as to qualify for deduction under Section 80P(2)(a)(i) of the Income-tax Act, 1961. (ii) Whether interest earned from deposits made in co-operative banks qualified for deduction under Section 80P(2)(d) of the Income-tax Act, 1961.

Issue (i): Whether interest income earned from investments was attributable to the appellant's business so as to qualify for deduction under Section 80P(2)(a)(i) of the Income-tax Act, 1961.

Analysis: The Tribunal had remanded the matter to the Assessing Officer for determining the head of income. The Court found no fundamental error in the remand order and no perversity in the Tribunal's approach. It held that an order of remand does not give rise to a substantial question of law unless perversity is demonstrated.

Conclusion: The remand on this issue was upheld and the appellant was not entitled to interference.

Issue (ii): Whether interest earned from deposits made in co-operative banks qualified for deduction under Section 80P(2)(d) of the Income-tax Act, 1961.

Analysis: The Court adopted its earlier view that where the recipient entity is a co-operative bank carrying on banking business, the deposit made in such entity does not qualify for deduction under Section 80P(2)(d). It further noted that Section 80P(4) operates as a bar once the investment is made in a co-operative bank.

Conclusion: The claim for deduction under Section 80P(2)(d) was rejected.

Final Conclusion: Both substantial questions were answered against the appellant, and the appeals were dismissed.

Ratio Decidendi: Interest earned from deposits in a co-operative bank is not deductible under Section 80P(2)(d) because Section 80P(4) bars such deduction, and a remand order on the head of income does not warrant interference absent perversity.

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