The ITAT allowed the assessee's appeal, holding that interest...

The ITAT allowed the assessee's appeal, holding that interest income earned from deposits with cooperative banks qualifies for deduction under section 80P(2)(d) of the Income Tax Act. The tribunal affirmed that a cooperative bank is a subset of cooperative societies, registered under relevant cooperative societies legislation, and thus interest derived from such banks by a cooperative society is deductible. Although subsection (4) of section 80P restricts certain deductions to cooperative banks themselves, it does not preclude a cooperative society from claiming deduction on interest income from its investments with cooperative banks. The decision aligns with established judicial precedents confirming that cooperative societies are entitled to the deduction, and the Assessing Officer's denial of the deduction was held unjustified. Consequently, the assessee's claim for deduction under section 80P(2)(d) was upheld, resulting in the appeal being allowed.