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TMI Blog2016 (8) TMI 270X X X X Extracts X X X X X X X X Extracts X X X X ..... g or an enterprise from any business referred to in sub-section (4)” whereas in Section 80-IA (2A) what is available for deduction is “hundred percent of the profits and gains of the eligible business”. The orders of both the AO and the CIT (A) to the extent they deny the Assessee, which in this case is in the business of providing telecommunication services, deduction in respect of the above items in terms of Section 80IA(2A) are unsustainable in law and have rightly been reversed by the ITAT. Section 80-IA (2A) treats an undertaking providing telecommunication services as a separate species warranting a separate treatment as is evident from the non-obstante clause with which it begins. The Court sees no reason why such an undertaking w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The challenge in these appeals is to the order dated 23rd December 2015 and the common order dated 22nd January 2016 passed by the Income Tax Appellate Tribunal ( ITAT ) in the following appeals: High Court Appeal Nos. Corresponding ITAT Appeal Nos. A.Y. Date of ITAT Order 476/2016 2176/DEL/2008 2005-06 22nd January 2016 477/2016 4275/DEL/2010 2006-07 22nd January 2016 478/2016 3386/DEL/2010 2004-05 23rd December 2015 479/2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n for undertaking engaged in providing telecommunication services. 7. Section 80IA (1), (2) and (2A) of the Act read as under: 80 IA: Deductions in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development, etc.- (1) Where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any business referred to in sub-section (4) (such business being hereinafter referred to as the eligible business), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction of an amount equal to hundred per cent of the profits and gains derived from s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty per cent of such profits and gains for further five assessment years. 8. The question arose in the context of the Assessee being asked to explain why certain specific items categorized as 'other income' and 'extra-ordinary item' in the Profit and Loss Account in assessment year 2004-05 should not be excluded from the profit and gains of the Assessee. According to the Revenue, these items could not be considered as profits and gains 'derived from' the eligible business for the purpose of deduction under Section 80 IA. The said six items were: (i) Extra Ordinary Items (ii) Refund from Universal Service Fund (iii) Interest from others (iv) Liquidated Damages (v) Excess provision written back ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e profits and gains of the eligible business . The following conclusion reached by the ITAT in para 13.11 of the impugned order correctly encapsulates the legal position as far as the interpretation of Section 80IA (2A) is concerned. 13.11 Thus, we find that the legislature being alive to providing tax deductions to business enterprises and undertakings, it wanted to curtail the time line during which deduction can be claimed and also addressing the extent upto which it can be claimed has consciously carved out an exception to specified undertakings/enterprises whose needs and priorities differ has taken care to expand the time line for claiming deductions. It has consciously enabled those undertakings/enterprise who fall under sub-se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation business is concerned, and under Section 80-IA (1) as far as any other eligible business is concerned. 13. In the first place as far as the present appeals are concerned, the above issue as posed by learned counsel for the Revenue is purely hypothetical. In any event, Section 80-IA (2A) treats an undertaking providing telecommunication services as a separate species warranting a separate treatment as is evident from the non-obstante clause with which it begins. The Court sees no reason why such an undertaking would not be able to take the benefit of deduction in terms of Section 80IA(2A) notwithstanding that the enterprise of which it forms part may have other eligible businesses for which the deduction would have to be calculated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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