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“eligible business”

DeductionsSection 80IASection 80IA975 judgments

The decision most relied on for eligible business is Totgars Co-operative Sale Society Ltd. v. ITO (322 ITR 283), cited in 1,283 judgments on BharatTax.

Leading authorities on eligible business

Totgars Co-operative Sale Society Ltd. v. ITO
322 ITR 283 · 2010 · Supreme Court
1,283
citing judgments

The interest income earned by a cooperative society from investing its surplus funds in fixed deposits with banks is not "derived from" its eligible business activities and is taxable as "income from other sources" under Section 56, thus not qualifying for deduction under Section 80P.

State Bank Of India v. CIT
389 ITR 578 · 2016 · High Court
817
citing judgments

Income arising from a cooperative society's surplus funds invested in short-term deposits and securities is not attributable to the society's core activities and, therefore, is not eligible for exemption under Section 80P(2)(a)(i) of the Income-tax Act.

Liberty India v. CIT
317 ITR 218 · 2009 · Supreme Court
571
citing judgments

The Supreme Court clarified that for profits and gains to be eligible for deductions under sections like 10B, 80IA, or 80IB, the income must be "derived from" or have a direct nexus to the eligible business activity. Income from incidental sources like the sale of scrips/licenses or interest on employee loans is generally not considered as derived from the eligible business for such deductions.

CIT v. Smifs Securities Ltd.
348 ITR 302 · 2012 · Supreme Court
540
citing judgments

Goodwill, whether arising from an amalgamation or a slump sale, is an intangible asset eligible for depreciation under Section 32(1) of the Income-tax Act. While the assessee must prove the existence and valuation of such goodwill, it is recognized as a depreciable asset.

Citizen Co-operative Society Ltd. v. ACIT
397 ITR 1 · 2017 · Supreme Court
499
citing judgments

A co-operative credit society engaged in banking business with the general public, accepting deposits from non-members and advancing loans to non-members, is treated as a co-operative bank. Such a society falls under the exclusionary clause of Section 80P(4) and is not eligible for deduction under Section 80P(2)(a)(i).

Totgar's Co-operative Sale Society Ltd. v. ITO
188 Taxmann 282 · 2010 · Supreme Court
486
citing judgments

Interest income earned by a co-operative society from investments, particularly with co-operative banks, is not eligible for deduction under Section 80P as it is not attributable to the core business activities of the society and constitutes "other income", not "profits and gains of business".

Pandian Chemicals Ltd. v. CIT
262 ITR 278 · 2003 · Supreme Court
353
citing judgments

Income eligible for deduction under Section 80IA or 80IC must have a direct nexus with the eligible business activity of the industrial undertaking. Income merely incidental to the business, even if part of the assessee's overall business, is not considered "derived from" the eligible undertaking.

CIT v. Sterling Foods
237 ITR 579 · 1999 · Supreme Court
311
citing judgments

Income eligible for profit-linked deductions under sections like 80-IC or 10B must have a direct nexus to the eligible business activity or be derived from the industrial undertaking itself, and not merely attributable to it or arising from a post-manufacturing event.

Judgments citing eligible business

Shree Durga Jewellers, Jawahar Nagar Jaipur vs. AO Circle 4 Jaipur, Cr Building Jaipur

In the result, the appeal of the assessee is allowed

ITA 33/JPR/2025[2017-18]Status: DisposedITAT Jaipur29 Apr 2025AY 2017-18
For Appellant: Shri Suhani Meharwal, CAFor Respondent: Shri Anup Singh, Addl. CIT
Section 143(1)Section 143(2)Section 143(3)Section 68

registered firm doing retail trade in gold ornaments wherein most of the sales were made to customers in cash. Assessee being in the eligible business and had turnover below Rs 2 crore opted for presumptive taxation u/s 44AD. Although he was not required to maintain regular books of accounts ... registered firm doing retail trade in gold ornaments; most of the sales were made to customers in cash. Assessee being in the eligible business and had turnover below Rs 2 crore opted for presumption taxation U/s 44AD.Although he was not required to maintain regular books of accounts but since

Niho Construction Ltd., New Delhi vs. ITO, Ward- 18(2), New Delhi

In the result, appeal of the Revenue is dismissed

ITA 3676/DEL/2018[2012-13]Status: DisposedITAT Delhi28 Apr 2025AY 2012-13

Bench: Shri Sudhir Kumar & Shri Manish Agarwal[Assessment Year : 2007-08] Acit, Vs M/S. Nuwave E Solutions (P) Circle-13(1), Ltd., 3Rd Floor, District Centre, New Delhi Dda Building, Nehru Place, New Delhi. Pan-Aabcn5790Q Appellant Respondent Appellant By Shri Pravin Rawal, Cit Dr Respondent By Dr. Rakesh Gutpa, Adv., Shri Saksham Agarwal, Ca, Shri Somil Agarwal, Adv. & Shri Deepesh Garg, Adv. Date Of Hearing 26.06.2025 Date Of Pronouncement 12.09.2025 Order Per Manish Agarwal, Am : The Captioned Appeal Is Filed By The Revenue Against The Order Dated 15.03.2011 Passed By Ld. Commissioner Of Income Tax (Appeal)-Xvi, New Delhi [“Cit(A)”, In Short] Passed U/S 250 Of The Income Tax Act, 1961 [“The Act”] Arising From The Assessment Order Dated 31.12.2010 Passed U/S 143(3) Of The Act Pertaining To Assessment Year 2007-08. 2. Brief Facts Of The Case Are That Assessee Is A Company & E- Filed Its Return Of Income On 30.08.2007, Declaring Total Income Of Inr 1,45,48,453/-. The Said Return Was Revised On 20.08.2008, Declaring The Same Income As Was Declared The Return Of Income Filed U/S 139(1). The Case Of The Assessee Was Selected For Scrutiny & Various Queries Were Raised Which Were Replied By The Assessee. The Assessee Is Engaged In The Business Of Development & Export Of Software & 100% Eou Registered With Director Software Technology Park Of India In Terms Of Registration Certificate Dated 31.03.1999. The Major Shareholder In The Assessee Company Is Shri Anil Gutpa Who Is Having 99% Shareholding & Is Taking Substantial Interest In Day-To-Day Affairs Of The Assessee & Also In Its Associate Enterprises (“Ae”) At Us Who Is The Sole Buyer Of The Software Developed By The Assessee.

Section 10Section 10ASection 139(1)Section 143(3)Section 250Section 40Section 801A

gain on account of currency fluctuation of INR 1,23,33,934/- by holding the same being not earned from the eligible business. 4. Besides this, AO made the disallowance of INR 3,55,47,260/- by invoking the provision of section

Ivl Dhunseri Petrochem Industries Private Limited, Kolkata vs. D.C.I.T., Circle - 11(1), Kolkata

In the result, appeal of the assessee is partly allowed for statistical purposes

ITA 1712/KOL/2024[2020-2021]Status: DisposedITAT Kolkata24 Apr 2025AY 2020-2021

Bench: Shri Rajesh Kumar & Shri Pradip Kumar Choubeyआयकर अपील सं/Ita No.1712/Kol/2024 (नििाारण वर्ा / Assessment Year : 2020-2021) Ivl Dhunseri Petrochem Vs Dcit, Circle-11(1), Kolkata Industries Pvt. Ltd. Dhunseri House, 4A Woodburn Park, L.R.Sarani, West Bengal-700020 Pan No. :Aafcd 5214 M (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) नििााररती की ओर से /Assessee By : Shri Akkal Dudhewala, Ca & Vidhi Ladia, Ca राजस्व की ओर से /Revenue By : Pradip Kumar Mondal, Cit-Dr सुनवाई की तारीख / Date Of Hearing : 19/03/2025 घोषणा की तारीख/Date Of Pronouncement : 23/04/2025 आदेश / O R D E R Rajesh Kumar, Am : This Is An Appeal Filed By The Assessee Against The Order Dated 26/07/2024, Passed By The Assessment Unit, National Faceless Assessment Centre U/S.143(3) R.W.S.144C(13) R.W.S.144B Of The Act, For The Assessment Year 2020-2021 On The Following Grounds :- 1.(A) For That On The Facts & In The Circumstances Of The Case & In Law, The Tpo Erred In Making A Downward Adjustment Of Rs.24,72,79,392/- In Respect Of The Transfer Value Of Power By The Captive Power Plant At Haldia, West Bengal. (B) For That On The Facts & In The Circumstances Of The Case & In Law, The Methodology Followed By The Assessee To Benchmark The Arm'S Length Value Of The Power Transferred By The Eligible Unit To The Non-Eligible Unit Fulfilled The Internal Cup Parameters & In That View Of The Matter The Transfer Pricing Adjustment Made By The Tpo Was Impermissible On The Given Facts & In Law. (C) For That On The Facts & In The Circumstances Of The Case & In Law, The Manner In Which The Drp/Tpo Has Benchmarked

For Appellant: Shri Akkal Dudhewala, CA and VidhiFor Respondent: Pradip Kumar Mondal, CIT-DR
Section 115Section 143(3)Section 234ASection 270ASection 80ISection 92C

seen that if the assessing officer disputes the consideration for supply of any goods by the assessee as recorded in the accounts of the eligible business on the ground that it does not correspond to the market value of such goods as on the date of the transfer, then ... purpose of deduction under Section 80-IA, the profits and gains of such eligible business shall be computed by adopting arm's length pricing. In other words, if the assessing officer rejects the price as not corresponding to the market value of such good, then he has to compute

DCIT Cir-4(1), Kolkata, Aayakar Bhawan vs. Mcleod Russel India Ltd, Kolkata

In the result, the appeal filed by the revenue is dismissed

ITA 1169/KOL/2023[2013-14]Status: DisposedITAT Kolkata16 Apr 2025AY 2013-14

Bench: Shri Rajesh Kumar&Shri Pradip Kumar Choubey]

Section 115OSection 143(2)Section 14ASection 80ISection 92C

Mcleod Russel India Ltd. (ii) to undertake substantial expansion to manufacture or produce any eligible article or thing (iii) to carry on any eligible business (7) For the purposes of this section - (iii) 'substantial expansion' means increase in the investment in the plant and machinery by at least twenty-five

Assistant Commissioner of Income Tax, C-1(1)(1), Bangalore vs. Bangalore International Airport Limited, Bangalore

In the result, the cross objection of the assessee is hereby partly allowed

ITA 1109/BANG/2024[2020-21]Status: DisposedITAT Bangalore16 Apr 2025AY 2020-21

Bench: Shri Waseem Ahmed & Shri Keshav Dubey

For Appellant: Shri T. Suryanarayana, AdvocateFor Respondent: Smt. Nandini Das, CIT-DR
Section 80I

Pandian Chemical reported in 262 ITR 278 to buttress his view that only the income which has direct nexus with eligible business activity of the industrial undertaking will be eligible for deduction under section 80IA of the Act. The AO, in view of the above, held that other income such ... activities was directly linked to the operation of the airport, and thus, the Assessee contended that such income formed an integral part of the eligible business under section 80IA of the Act. The facilities from which revenue was earned were enumerated in the agreement, reinforcing that the services rendered were

Assistant Commissioner of Income Tax, C-1(1)(1), Bangalore vs. Bangalore International Airport Limited, Bangalore

ITA 1108/BANG/2024[2018-19]Status: DisposedITAT Bangalore16 Apr 2025AY 2018-19

Bench: Shri Waseem Ahmed & Shri Keshav Dubey

For Appellant: Shri T. Suryanarayana, AdvocateFor Respondent: Smt. Nandini Das, CIT-DR
Section 143(4)Section 80I

Pandian Chemical reported in 262 ITR 278 to buttress his view that only the income which has direct nexus with eligible business activity of the industrial undertaking will be eligible for deduction under Section 80IA of the Act. The AO, in view of the above, held that other income such ... activities was directly linked to the operation of the airport, and thus, the Assessee contended that such income formed an integral part of the eligible business under Section 80IA of the Act. The facilities from which revenue was earned were enumerated in the agreement, reinforcing that the services rendered were

Hari Kishan Rathi, New Delhi vs. ACIT, Central Circle-14, New Delhi

ITA 2566/DEL/2022[2018-19]Status: DisposedITAT Delhi08 Apr 2025AY 2018-19

Bench: Shri Anubhav Sharma & Shri Amitabh Shukla

For Appellant: Sh. Rohit Jain, AdvFor Respondent: Sh. Mukesh Kumar Jha, CIT, DR
Section 143(3)

financial projects in new and renewable sources of energy and the same certainly falls in category of ‘development of infrastructure facility’ which is ‘eligible business’ u/s 36(1) Explanation (b). Revenue does not dispute that assessee is giving long ... considered view that once we hold that assessee is eligible for claiming deduction u/s 36(1)(viii) of the Act for being engaged in eligible business then the burden on the revenue is to specifically P a g e | 13 ITA Nos. 2566 to 2573 & 2910 to 2917/Del/2024 Indian Renewable

Asstt. Commissioner of Income Tax, CC-1, Lucknow, Aayakar Bhawan, Ashok Marg vs. Apco Infratech Pvt. Ltd., Vibhuti Khand Gomti Nagar Lko

In the result, appeals vide

ITA 623/LKW/2024[2018-19]Status: DisposedITAT Lucknow02 Apr 2025AY 2018-19

Bench: Shri Anadee Nath Misshra & Shri Subhash Malguria

Section 143(1)Section 143(2)Section 143(3)Section 80I

kept for release of security/retention money. In the assessment orders, the Assessing Officer held that the aforesaid income has not been derived from the eligible business of the assessee and he declined the claim of the assessee for deduction u/s 80IA of the Act in respect of the aforesaid amount ... quantum of deduction under sub-section (1) of Section 80-IA should be on the basis that the source of income from the eligible business was the only source of income of an assessee and therefore, the deduction so determined should be allowed only against ‘business income’. According

M/S Apco Infratech Pvt. Ltd., Lucknow vs. D/ACIT-1, Central-1, Lucknow

In the result, appeals vide

ITA 17/LKW/2024[2018-19]Status: DisposedITAT Lucknow02 Apr 2025AY 2018-19

Bench: Shri Anadee Nath Misshra & Shri Subhash Malguria

Section 143(1)Section 143(2)Section 143(3)Section 80I

kept for release of security/retention money. In the assessment orders, the Assessing Officer held that the aforesaid income has not been derived from the eligible business of the assessee and he declined the claim of the assessee for deduction u/s 80IA of the Act in respect of the aforesaid amount ... quantum of deduction under sub-section (1) of Section 80-IA should be on the basis that the source of income from the eligible business was the only source of income of an assessee and therefore, the deduction so determined should be allowed only against ‘business income’. According

ACIT, Range-I, Lucknow vs. M/S Apco Infratech Pvt. Ltd., Lucknow

ITA 454/LKW/2020[2017-18]Status: DisposedITAT Lucknow02 Apr 2025AY 2017-18

Bench: Shri Anadee Nath Misshra & Shri Subhash Malguria

Section 143(1)Section 143(2)Section 143(3)Section 80I

That in the earlier submission, Indirect income of HO was reduced by HO common expense and thereafter net expense is allocated to the eligible business units for computing the profit of eligible units under section 801A. In the present submission, Interest income from BGs Margin for respective project are directly ... that as the interest on borrowed funds booked in the HO account already stands allocated, income of the specific unit not derived from its eligible business, has to be excluded to determine the income eligible for claim of deduction u/s 801A(4). As regards admissibility of the claim for deduction

ACIT, Range-I, Lucknow vs. M/S Apco Infratech Pvt. Ltd., Lucknow

ITA 453/LKW/2020[2016-17]Status: DisposedITAT Lucknow02 Apr 2025AY 2016-17

Bench: Shri Anadee Nath Misshra & Shri Subhash Malguria

Section 143(1)Section 143(2)Section 143(3)Section 80I

That in the earlier submission, Indirect income of HO was reduced by HO common expense and thereafter net expense is allocated to the eligible business units for computing the profit of eligible units under section 801A. In the present submission, Interest income from BGs Margin for respective project are directly ... that as the interest on borrowed funds booked in the HO account already stands allocated, income of the specific unit not derived from its eligible business, has to be excluded to determine the income eligible for claim of deduction u/s 801A(4). As regards admissibility of the claim for deduction

M/S. Apco Infratech Pvt. Ltd., Lucknow vs. ACIT-I, Lucknow

In the result, appeals vide I

ITA 357/LKW/2020[2017-18]Status: DisposedITAT Lucknow02 Apr 2025AY 2017-18

Bench: Shri Anadee Nath Misshra & Shri Subhash Malguria

Section 143(1)Section 143(2)Section 143(3)Section 80I

That in the earlier submission, Indirect income of HO was reduced by HO common expense and thereafter net expense is allocated to the eligible business units for computing the profit of eligible units under section 801A. In the present submission, Interest income from BGs Margin for respective project are directly ... that as the interest on borrowed funds booked in the HO account already stands allocated, income of the specific unit not derived from its eligible business, has to be excluded to determine the income eligible for claim of deduction u/s 801A(4). As regards admissibility of the claim for deduction

M/S. Apco Infratech Pvt. Ltd., Lucknow vs. ACIT-1, Lucknow

In the result, appeals vide

ITA 356/LKW/2020[2016-17]Status: DisposedITAT Lucknow02 Apr 2025AY 2016-17

Bench: Shri Anadee Nath Misshra & Shri Subhash Malguria

Section 143(1)Section 143(2)Section 143(3)Section 80I

kept for release of security/retention money. In the assessment orders, the Assessing Officer held that the aforesaid income has not been derived from the eligible business of the assessee and he declined the claim of the assessee for deduction u/s 80IA of the Act in respect of the aforesaid amount ... quantum of deduction under sub-section (1) of Section 80-IA should be on the basis that the source of income from the eligible business was the only source of income of an assessee and therefore, the deduction so determined should be allowed only against ‘business income’. According

Assistant Commissioner of Income Tax, Circle-5(1), Kolkata vs. Emami Limited, Kolkata

In the result, the appeal of the Revenue is dismissed

ITA 1330/KOL/2024[2017-18]Status: DisposedITAT Kolkata01 Apr 2025AY 2017-18

Bench: Shri Rajesh Kumar, Am & Shri Pradip Kumar Choubey, Jm

For Appellant: Shri Akkal Dudhewala, ARFor Respondent: Shri Ranu Biswas, DR

this regard are as follows:- "19. We note that the case of the AO is that the profits derived by the assessee from the eligible business are more than the ordinary profits of other business and therefore he estimated at what could be a reasonable profit from such eligible business ... such profit be taken as reasonably deemed to have been derived from the eligible business for the purposes of computing the deduction u/s 80-IE of the Act. We find that in the entire assessment order, there is no material or any evidence which has been brought

Jsw Energy Limited, Mumbai vs. The Assistant Commissioner of Income Tax, Central Circle 8(3), Mumbai

In the result, both the appeals are allowed partly for statistical

ITA 3714/MUM/2024[2020-21]Status: DisposedITAT Mumbai26 Mar 2025AY 2020-21

Bench: Shri Om Prakash Kant () & Ms. Kavitha Rajagopal ()

For Appellant: Mr. Gaurav KabraFor Respondent: Ms. Neena Jeph, CIT-DR/
Section 115JSection 14ASection 37Section 80I

claim of the assessee was rejected mainly on the ground that according to the Assessing Officer deduction u/s 80IA is in respect of eligible business, the Ld. Assessing Officer referred to 80AB of the Act and according to which deduction has to be allowed with reference to income included ... lower authorities. The core issue in dispute is whether the deduction is to be computed in respect of profit of each undertaking engaged in eligible business or deduction has to be computed on aggregate profit of all the units engaged in eligible business. Fore ready reference, the relevant provisions

M/S. Capital Institute of Competition Training (P) Ltd., New Delhi vs. DCIT, Faridabad

ITA 3408/DEL/2017[2012-13]Status: DisposedITAT Delhi25 Mar 2025AY 2012-13

Bench: Sh. Satbeer Singh Godara & Sh. Naveen Chandra

For Appellant: Ms. Gurneet Kaur, AdvFor Respondent: Sh. Manish Gupta, Sr. DR
Section 143(3)Section 80PSection 80P(2)

present instance received from parking of surplus funds in fixed deposits with scheduled/nationalized banks could not be held as “derived” from an eligible business activity under section 80P(2); and, therefore, the same deserves to be assessed as income from “other” sources only. 4. Mr. Gupta also quotes

Mrinal Das, Baksa vs. ITO, Ward - Barpeta Road, Barpeta

In the result, the appeal filed by the assessee is allowed

ITA 255/GTY/2024[2018-19]Status: DisposedITAT Guwahati24 Mar 2025AY 2018-19

Bench: Shri Manomohan Das & Shri Rakesh Mishra

Section 144Section 147Section 148Section 194ASection 250Section 40A(3)Section 44ASection 69A

44AD. (1) Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an eligible assessee engaged in an eligible business, a sum equal to eight per cent of the total turnover or gross receipts of the assessee in the previous year on account of such ... given full effect to and no further deduction under those sections shall be allowed. (3) The written down value of any asset of an eligible business shall be deemed to have been calculated as if the eligible assessee had claimed and had been actually allowed the deduction in respect

Income Tax Officer Ward 1(4), Nagpur vs. Rahi Mahila Nagri Sahakari Patsanstha Limited, Nagpur

In the result, appeal by the Revenue stands dismissed

ITA 56/NAG/2025[2020-21]Status: DisposedITAT Nagpur21 Mar 2025AY 2020-21

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member

For Appellant: Ms. Alfiya RozieFor Respondent: Shri Abhay Y. Marathe
Section 80PSection 80P(2)(a)Section 80P(2)(d)

disallowances, related to the business activity against which the Chapter VI-A deduction has been claimed, result in enhancement of the profits of the eligible business, and that deduction under Chapter VI-A is admissible on the profits so enhanced by the disallowance." The principle laid down by the Board

Sh. Sahab Singh, Ladwa vs. ITO, Ward-3, Kurukshetra

In the result, appeal of the Assessee is allowed for statistical purposes

ITA 61/CHANDI/2023[2017-18]Status: DisposedITAT Chandigarh20 Mar 2025AY 2017-18

Bench: SHRI. LALIET KUMAR (Judicial Member), SHRI. KRINWANT SAHAY (Accountant Member)

For Appellant: Shri Neeraj Garg, C.AFor Respondent: Shri Ved Parkash Kalia, Sr. DR
Section 143(1)Section 250Section 44A

assessee computed its income under Section 44AD of the Income Tax Act, which allows for presumptive taxation at 8% of gross receipts for eligible businesses. The provisions of Section 44AD are designed to simplify the taxation process for small businesses and contractors, and the assessee is not required to maintain

Reckitt Benckiser India Private Limited, Gurgaon, Haryana vs. D.C.I.T., Circle 11.1, Kolkata

ITA 2319/KOL/2024[2021-2022]Status: DisposedITAT Kolkata18 Mar 2025AY 2021-2022

Bench: Shri Rajesh Kumar & Shri Sonjoy Sarma

For Respondent: Shri Deepak Chopra, AR & Shri Rohan Khare, AR
Section 143(3)Section 144C(13)Section 144C(5)Section 92BSection 92C

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH KOLKATA BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER & SHRI SONJOY SARMA, JUDICIAL MEMBER