Section 80P deduction for interest on co-operative bank deposits allowed under the wider meaning of co-operative society.

Section 80P(2)(d) allows deduction for interest or dividend income derived from investments with another co-operative society, and a co-operative bank was treated as falling within that expression for this purpose. Section 80P(4) withdraws the deduction from co-operative banks themselves, but does not bar a co-operative society from claiming deduction on interest earned from deposits placed with such a bank. Applying binding precedent and coordinate bench decisions, the Tribunal held that the interest income qualified for deduction and the disallowance was deleted.

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Issues: Whether the assessee was entitled to deduction under section 80P(2)(d) of the Income-tax Act in respect of interest earned on deposits with a co-operative bank.

Analysis: The claim turned on the scope of section 80P(2)(d), which allows deduction for income by way of interest or dividends derived from investments with any other co-operative society. The Tribunal noted that a co-operative bank remains a co-operative society for the purpose of this provision and relied on the settled view that the expression "co-operative society" is of wide amplitude. It further noted that the bar in section 80P(4) withdraws deduction from co-operative banks themselves, but does not prevent a co-operative society from claiming deduction on interest received from deposits kept with such a bank. The Tribunal treated the issue as covered by binding precedent and consistent coordinate bench decisions.

Conclusion: The assessee was entitled to deduction under section 80P(2)(d), and the disallowance was deleted.

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