“Section 80(4)”

Income earned from deposits or investments directly and inextricably linked to the acquisition of assets or the setting up of a business project during its construction period is incidental to the asset acquisition, reducing the project cost, or constitutes business receipts eligible for relevant deductions, rather than 'income from other sources'.

Interest earned from the temporary parking of borrowed funds specifically intended for project development, prior to the commencement of business, constitutes a capital receipt inextricably linked to the project and is not taxable as 'income from other sources'.

Deduction under section 80-IA is available to developers who undertake entrepreneurial investment risk, not merely to contractors who undertake business risk. The nature of the work undertaken determines eligibility.

An appellate authority can admit additional legal grounds for the first time, even if not raised earlier, provided these grounds are purely legal, go to the root of the matter, and the relevant facts for their adjudication are already on record.

The Gujarat High Court holds that the explanation to Section 80-IA(4) of the Income-tax Act, regarding works contracts for infrastructure facilities, is clarificatory and explanatory in nature, not an amendment with retrospective effect. Its vires are upheld as it does not levy tax retrospectively.

A taxpayer is eligible for deduction under Section 80IA for developing and operating infrastructure facilities, with the decision clarifying the distinction between a contractor and a developer for this purpose.

Where an assessee invests its own funds in an infrastructure development project, it is presumed to be acting as a developer, not merely a contractor, making it eligible for deduction under section 80-IA(4).

Refunds of excise duty are considered profits and gains derived from an industrial undertaking and are eligible for deduction under Section 80-IB of the Income Tax Act.