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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

Krishak Bharati Cooperative Ltd vs. Deputy Commissioner of Income Tax

The appeals are allowed

ITA - 1248 / 2010HC Delhi24 Jul 2013
For Appellant: Mr S. Ganesh, Sr Advocate with Ms Surekha RamanFor Respondent: Mr Rohit Madan Kumar, Ms Pushpa Sharma
Section 260Section 80

under:- “14. … It is evident that section 80-IB provides for allowing of deduction in respect of profits and gains derived from the eligible business. The words “derived from” are narrower in connotation as compared to the words “attributable to”. In other words, by using the expression “derived from”, Parliament

Commissioner of Income Tax vs. Delhi Press Patra Prakashan Ltd

ITA - 451 / 2010HC Delhi31 May 2013
For Appellant: Mr N.P. SahniFor Respondent: Mr O.P. Dua, Sr. Adv. with Ms Babita
Section 260ASection 80

Section 80-IA(8) of the Act. Section 80-IA(8) of the Act would be applicable only where goods were transferred from an eligible business to any other business of the assessee and the consideration recorded was not at market values. In the present case, admittedly Unit ... hold that the accounts relating to Unit no. 4 were required to be drawn up as if the income from the eligible business was the only business and thus expenses incurred by the assessee in packaging and forwarding as well as for purchase of paper were required to be allocated

Commissioneer of Income Tax vs. Delhi Press Patra Prakashan

ITA - 1734 / 2006HC Delhi31 May 2013
For Appellant: Mr N.P. SahniFor Respondent: Mr O.P. Dua, Sr. Adv. with Ms Babita
Section 260ASection 80

Section 80-IA(8) of the Act. Section 80-IA(8) of the Act would be applicable only where goods were transferred from an eligible business to any other business of the assessee and the consideration recorded was not at market values. In the present case, admittedly Unit ... hold that the accounts relating to Unit no. 4 were required to be drawn up as if the income from the eligible business was the only business and thus expenses incurred by the assessee in packaging and forwarding as well as for purchase of paper were required to be allocated

Commissioner of Income Tax Del vs. Delhi Press Patra Prakashan

ITA - 1733 / 2006HC Delhi31 May 2013
For Appellant: Mr N.P. SahniFor Respondent: Mr O.P. Dua, Sr. Adv. with Ms Babita
Section 260ASection 80

Section 80-IA(8) of the Act. Section 80-IA(8) of the Act would be applicable only where goods were transferred from an eligible business to any other business of the assessee and the consideration recorded was not at market values. In the present case, admittedly Unit ... hold that the accounts relating to Unit no. 4 were required to be drawn up as if the income from the eligible business was the only business and thus expenses incurred by the assessee in packaging and forwarding as well as for purchase of paper were required to be allocated

Commissioner of Income Tax vs. Delh Press Patra Prakashan

ITA - 1732 / 2006HC Delhi31 May 2013
For Appellant: Mr N.P. SahniFor Respondent: Mr O.P. Dua, Sr. Adv. with Ms Babita
Section 260ASection 80

Section 80-IA(8) of the Act. Section 80-IA(8) of the Act would be applicable only where goods were transferred from an eligible business to any other business of the assessee and the consideration recorded was not at market values. In the present case, admittedly Unit ... hold that the accounts relating to Unit no. 4 were required to be drawn up as if the income from the eligible business was the only business and thus expenses incurred by the assessee in packaging and forwarding as well as for purchase of paper were required to be allocated

Commissioner of Income Tax vs. S.M.Flanges P.Ltd

The appeal is partly allowed in the above terms

ITA - 1153 / 2009HC Delhi13 Sept 2012
Section 7Section 80

provisions of sub-section (5) and sub- sections (7) to {1 2) of Section 80-IA, so far as may be, applicable to the eligible business under Section 80-IB. Therefore, at the outset, we stated that one needs to read Sections 80I, 80-IA and 80-IB as having ... perusal of sub-section(5) of Section 80-IA, it is noticed that it provides for manner of computation of profits of an eligible business. Accordingly, such profits are to be computed as if such eligible business is the only source of income of the assessee. Therefore, the devices adopted

CIT vs. Sadhu Forging Ltd

ITA - 167 / 2011HC Delhi03 Jun 2011
Section 37Section 80Section 80I

customers and was charging them on job-work basis or on the basis of labour charges. It will still be qualified as carrying eligible business under Section 80IB. Same is the ratio of the decisions in the cases of (i) Commissioner of Income Tax v. Metalman Auto

CIT vs. Le Passage to India Tours & Travels Pvt Ltd

ITA - 1859 / 2010HC Delhi08 Apr 2011
Section 80

flow from the scheme framed by the Central Government or from the provisions of Customs Act, 1962 cannot be treated as incentive profits from eligible business under Section 80IB of the Act. 12. If one has regard to the aforesaid pronouncement of the Apex Court, attributing the restricted meaning

Praveen Soni vs. Commissioner of Income Tax

Appeal is allowed in the aforesaid terms

ITA - 1145 / 2009HC Delhi29 Mar 2011
Section 80I

undertaking and 2011:DHC:1910-DB ITA No.1145 of 2009 Page 16 of 19 also profits and gains derived by the undertaking from the eligible business and deduction under Section 80IB of the I.T.Act. 15. The purpose for industrial undertaking to be regarded as small scale industrial undertaking

The Commissioner of Income Tax III vs. Sono Koyo Steering Systems Ltd. Gurgaon

The appeals are dismissed

ITA - 194 / 2009HC Delhi10 Feb 2010

Bench: Us, Being The Order Dated 28.09.2007 Relating To Assessment Years 1992-93 & 1993-94 Arising Out Of Ita Nos. 2703/Del/2004, 2704/Del/2004 & The Order Dated 06.06.2008 Which Relates To Assessment Years 1994-95, 1995-96 & 2000- 01 In Ita Nos.3877/Del/2005, 3878/Del/2005 & 5480/Del/2003.

For Respondent: Mr R. Santhanam
Section 28Section 80

said Act, the profits and gains of the Kalamb unit for the purposes of determining the 2010:DHC:832-DB eligible business of the said unit was the only source of income of the assessee. This court observed that the Assessing Officer had erroneously mixed the profits of the Delhi

The Commissioner of Income Tax Delhi vs. Sona Koyo Steering Systems Ltd

The appeals are dismissed

ITA - 788 / 2009HC Delhi10 Feb 2010

Bench: Us, Being The Order Dated 28.09.2007 Relating To Assessment Years 1992-93 & 1993-94 Arising Out Of Ita Nos. 2703/Del/2004, 2704/Del/2004 & The Order Dated 06.06.2008 Which Relates To Assessment Years 1994-95, 1995-96 & 2000- 01 In Ita Nos.3877/Del/2005, 3878/Del/2005 & 5480/Del/2003.

For Respondent: Mr R. Santhanam
Section 28Section 80

said Act, the profits and gains of the Kalamb unit for the purposes of determining the 2010:DHC:829-DB eligible business of the said unit was the only source of income of the assessee. This court observed that the Assessing Officer had erroneously mixed the profits of the Delhi

The Commissioner of Income Tax vs. Sona Koya Steering Systems Ltd

The appeals are dismissed

ITA - 761 / 2009HC Delhi10 Feb 2010

Bench: Us, Being The Order Dated 28.09.2007 Relating To Assessment Years 1992-93 & 1993-94 Arising Out Of Ita Nos. 2703/Del/2004, 2704/Del/2004 & The Order Dated 06.06.2008 Which Relates To Assessment Years 1994-95, 1995-96 & 2000- 01 In Ita Nos.3877/Del/2005, 3878/Del/2005 & 5480/Del/2003.

For Respondent: Mr R. Santhanam
Section 28Section 80

said Act, the profits and gains of the Kalamb unit for the purposes of determining the 2010:DHC:830-DB eligible business of the said unit was the only source of income of the assessee. This court observed that the Assessing Officer had erroneously mixed the profits of the Delhi

The Commissioner of Income Tax Delhi vs. Sona Koya Steering Systems Ltd

The appeals are dismissed

ITA - 416 / 2009HC Delhi10 Feb 2010

Bench: Us, Being The Order Dated 28.09.2007 Relating To Assessment Years 1992-93 & 1993-94 Arising Out Of Ita Nos. 2703/Del/2004, 2704/Del/2004 & The Order Dated 06.06.2008 Which Relates To Assessment Years 1994-95, 1995-96 & 2000- 01 In Ita Nos.3877/Del/2005, 3878/Del/2005 & 5480/Del/2003.

For Respondent: Mr R. Santhanam
Section 28Section 80

said Act, the profits and gains of the Kalamb unit for the purposes of determining the 2010:DHC:834-DB eligible business of the said unit was the only source of income of the assessee. This court observed that the Assessing Officer had erroneously mixed the profits of the Delhi

Commissioner of Income Tax vs. Sono Koyo Steering Systems Ltd. Gurgaon

The appeals are dismissed

ITA - 1279 / 2008HC Delhi10 Feb 2010

Bench: Us, Being The Order Dated 28.09.2007 Relating To Assessment Years 1992-93 & 1993-94 Arising Out Of Ita Nos. 2703/Del/2004, 2704/Del/2004 & The Order Dated 06.06.2008 Which Relates To Assessment Years 1994-95, 1995-96 & 2000- 01 In Ita Nos.3877/Del/2005, 3878/Del/2005 & 5480/Del/2003.

For Respondent: Mr R. Santhanam
Section 28Section 80

said Act, the profits and gains of the Kalamb unit for the purposes of determining the 2010:DHC:831-DB eligible business of the said unit was the only source of income of the assessee. This court observed that the Assessing Officer had erroneously mixed the profits of the Delhi

Commissioner of Income Tax vs. Shriram Pistons & Rings Limited

Appeal is partly allowed, as aforesaid

ITA - 815 / 2007HC Delhi23 Dec 2009
Section 5Section 80Section 80H

respect of incomes having direct nexus with the profits of the undertaking, hence, all incomes that arose during the course of running of the eligible business would be eligible for deduction under Section 80IB, which would include income arising on sale of DEPB at premium.” 5. Though the aforesaid case