“deduction u/s 80IA”
The decision most relied on for deduction u/s 80IA is CIT v. ABG Heavy Industries Ltd. (322 ITR 323), cited in 229 judgments on BharatTax.
Leading authorities on deduction u/s 80IA
The Assessing Officer cannot deny a Section 80IA deduction by merely asserting that the assessee is not a "developer" without considering the relevant agreements and facts. Entitlement to Section 80IA deduction requires a thorough examination of the assessee's role as a developer.
When computing deduction under Section 80IA, specifically for inter-unit transfer of power, the benefit cannot be claimed based on rates chargeable by distribution licensees to consumers. The deduction must be computed based on the rate fixed by the Tariff Regulation Commission for sale by electricity generating companies.
An assessment order is erroneous for the purpose of Section 263 if the Assessing Officer fails to apply mind to relevant material, proceeds on an incorrect assumption of facts, or makes an incorrect application of law.
For the purpose of Section 80IA relief, the sale of power is not a criterion for granting relief. Captive consumption of power must be valued at market price, and classification of units as saleable or non-saleable is irrelevant for determining the Arm's Length Price (ALP).
The initial assessment year for claiming deduction under Section 80-IA is the first year the assessee actually claims the deduction, not necessarily the first year the enterprise is set up. The deduction under Section 80-IA applies only from the assessment year in which the claim is first made.
For the purpose of computing deduction under Section 80-IA, profits of other businesses do not need to be notionally brought forward and have no effect on the deduction claimed. Losses of earlier years already set off cannot be notionally set off again against current income eligible for deduction.
The requirement to furnish an audit report along with the return of income under Section 80IA(7) of the Income Tax Act, 1961, is directory and not mandatory, and will be satisfied if the report is filed during the assessment proceedings.
This case is cited for the proposition that deductions under sections 80IA and 80IAB of the Income Tax Act, 1961, are not available for infrastructure facilities unless they are specifically enumerated in the relevant sub-sections.
