Summary
Deduction quantified under Section 80-IA was allowable against gross total income, including income under other heads, subject to the overall Chapter VI-A ceiling; it was not confined to income under the head business. Section 80AB governs computation using net eligible income, while Section 80-IA(5) treats the eligible business as the sole source only to quantify the deduction. Neither provision imposed the Revenue’s additional restriction at the stage of allowing that deduction.
Issues
- Whether deduction computed under Section 80-IA could be allowed against gross total income or only business income.
- Whether Sections 80AB and 80-IA(5) imposed a business-income ceiling.
Provisions considered
- Sections 80AB and 80-IA(1), (5), Income-tax Act, 1961Distinguished quantification of eligible-business deduction from allowance against gross total income, subject to the aggregate statutory ceiling. (¶ 9-15)
Held
- Section 80AB requires computation of deduction on net eligible income and determines the deductible income included in gross total income. It does not curtail Section 80-IA by restricting allowance to income under the business head. (¶ 9)
- Section 80-IA(5) treats eligible business as the only income source for determining the quantum of deduction. This antecedent computation rule does not determine the extent to which the resulting deduction may be allowed when computing total income. (¶ 10-15)
- Here the quantified deduction of Rs. 492,78,60,973 was undisputed. Income from other sources could be included along with business income when allowing deductions, with aggregate Chapter VI-A deductions limited to gross total income. (¶¶ 3, 9, 12)
- Synco Industries distinguished actual computation from treatment of the deduction when arriving at total income; the analogous provision supported the assessee. The further argument seeking a narrow construction of “derived from” did not require determination. (¶ 14-15)
Result
Revenue’s appeal dismissed on the extent of deduction under Section 80-IA; five connected appeals disposed of on the same terms. Civil Appeal No. 1509 of 2021 de-tagged because it raised unrelated questions.