Deduction for interest from co-operative bank investments allowed under section 80P(2)(d), as section 80P(4) does not override it.

A co-operative society is entitled to deduction under section 80P(2)(d) on interest earned from investment with a co-operative bank, because a co-operative bank is treated as a co-operative society for that clause. The exclusion in section 80P(4) does not, by itself, withdraw the deduction where section 80P(2)(d) has not been correspondingly amended. Following the binding High Court view, the interest income remained eligible for deduction and the disallowance was set aside.

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Issues: Whether interest income earned by a co-operative society from investment with a co-operative bank is eligible for deduction under section 80P(2)(d) of the Income-tax Act, 1961 despite the exclusion in section 80P(4).

Analysis: The appeal turned on the settled legal position that a co-operative bank is treated as a co-operative society for the purpose of section 80P(2)(d). The jurisdictional High Court had already held that deduction is available to a co-operative society on interest earned from investment made with a co-operative bank, and that section 80P(4) does not, by itself, take away the benefit of section 80P(2)(d) in the absence of any amendment to that clause. Following that binding view, the interest income in question remained eligible for deduction.

Conclusion: The issue was decided in favour of the assessee, and the deduction under section 80P(2)(d) was allowable.

Final Conclusion: The disallowance of deduction under section 80P was set aside and the assessee's claim was accepted on merits.

Ratio Decidendi: A co-operative society is entitled to deduction under section 80P(2)(d) on interest earned from a co-operative bank, and section 80P(4) does not deny that benefit absent a corresponding legislative amendment.

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