Interest from co-operative bank deposits qualifies for deduction under section 80P(2)(d) when bank is treated as a co-operative society.

Interest earned by a co-operative society from fixed deposits placed with co-operative banks was held eligible for deduction under section 80P(2)(d) because a co-operative bank was treated as a co-operative society for that provision. The Tribunal followed coordinate bench and High Court authority, and distinguished Totgar's Co-operative Sale Society Ltd. on the basis that the receipts arose from deposits with co-operative banks rather than commercial banks. The deduction was allowed and the related additions were deleted.

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Issues: Whether interest earned by a co-operative society from fixed deposits placed with co-operative banks qualifies for deduction under section 80P(2)(d) of the Income-tax Act, 1961.

Analysis: The Tribunal noted that the assessee, being a co-operative society, had earned interest from deposits with co-operative banks. It relied on coordinate bench decisions and High Court authority holding that a co-operative bank is a co-operative society for the purpose of section 80P(2)(d), and distinguished the ratio of Totgar's Co-operative Sale Society Ltd. on the ground that the present receipts arose from deposits with co-operative banks rather than commercial banks. Following the consistent view taken in earlier decisions, the Tribunal held that the interest income was eligible for deduction.

Conclusion: The claim for deduction under section 80P(2)(d) was allowed and the additions were deleted.

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