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2023 (3) TMI 46 - AT - Income TaxDenial of deduction u/s 80P(2)(d) - interest income received from various co-operative banks - HELD THAT:- Revenue denied the deduction under section 80P(2)(d) on the basis that the interest income earned from co-operative bank is not covered under the aforesaid provisions and the said provision only grants deduction in respect of interest earned from co-operative society. In this regard, it is pertinent to note that all co-operative banks are co-operative societies but vice versa is not true. We find that the coordinate benches of the Tribunal have consistently taken a view in favour of the assessee and held that even the interest earned from the co-operative banks are allowable as deduction u/s 80P(2)(d). As regards the decision of in Mavilayi Service Co-operative Bank Ltd. [2021 (1) TMI 488 - SUPREME COURT] on which reliance has been placed by the learned CIT(A) as well as by the DR, we find that the said decision only clarifies the aspect that section 80P(4) is a proviso to the main provision and excludes only co-operative banks, which are co-operative societies and also possesses a licence from RBI to do banking business - we are of the considered view that the aforesaid decision is of relevance only in a case where the assessee, who is a co-operative bank, claims a deduction u/s 80P of the Act - such is not the facts of the present case. Therefore, in view of the above and respectfully following the decision of the coordinate bench, we uphold the plea of the assessee and direct the AO to grant deduction u/s 80P(2)(d) to the assessee in respect of interest income earned from investment with co-operative banks. Accordingly, we set aside the impugned order passed by the learned CIT(A). As a result, ground No. 1 raised by the assessee is allowed.
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