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Assessee has raised the ground that on the facts and circumstances of thecase, the CIT(A) erred in upholding action of the assessing officer in sustaining disallowance of deduction under section 80P(2)(a)(i) of the Income Tax Act, 1961 (“ the Act”) to the extent of Rs. 1,90,90,288 claimed on interest income earned from investment of funds in commercial banks and cooperative banks/societies on the ground that such interest income is not eligible for deduction under that section.

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Sec. 80P(2) of Income Tax Act, 1961— Deduction — Section 80P(2)(d) allows whole deduction of an income by way of interest or dividends derived by the co-operative society from its investment with any other co-operative society and this provision does not make any distinction in regard to source of the investment because this section envisages deduction in respect of any income derived by the co-operative society from any investment with a co-operative society and revenue is not required to look to the nature of the investment whether it was from its surplus funds or otherwise, hence, keeping in view the provisions of the Act it was held that assessee is eligible for deduction u/ s 80P(2)(d) on the income earned by the way of interest from the co-operative societies - MANTOLA COOPERATIVE THRIFT & CREDIT SOCIETY LTD. V/s ITO - [2020] 27 ITCD Online 072 (ITAT-DELHI)