Assessee was a co-operative society carrying out banking business and providing credit facilities to its members. It had three classes of members, namely, regular members, associate members and nominal members. Assessing Officer disallowed deduction claimed under section 80P on ground that assessee was catering to different classes of members having different rights with regard to participation in share profit and dividend, therefore, essential feature, i.e. concept of mutuality, was missing in case of assessee-Assessee submitted that as per section 18 of Karnataka Cooperative Societies Act, 1959, a cooperative society was legally allowed to admit nominal and associate members. Since  the assessee operated under Karnataka Cooperative Societies Act, which permits inclusion of nominal and associate members, and Supreme Court in Mavilayi Service Co-operative Bank Ltd. v. CIT(2021) 279 Taxman 75/431 ITR 1 (SC)   held that eligibility under section 80P must be determined under relevant State law, presence of such members did not vitiate mutuality. The Tribunal directed the  Assessing Officer  to verify mandatory requirement for making FD as per provision of Karnataka Cooperative Societies Act, 1959 and if deposit was found within limit of mandatory requirement, then interest earned from such deposit be allowed. Matter remanded. Dedcution on rental income, commissions and small other income heads, since said income was not arising from business of assessee as envisaged under section 80P, disallowance was  confirmed.  (AY. 2017-18)