“Section 80(5)(3)”
The decision most relied on for Section 80(5)(3) is Velayudhaswamy Spinning Mills (P) Ltd. v. ACIT (340 ITR 477), cited in 213 judgments on BharatTax.
Leading authorities on Section 80(5)(3)
If unabsorbed depreciation or losses from years prior to the initial assessment year for Section 80-IA claim have already been set off against other income, they cannot be notionally carried forward again to reduce the profits of the eligible unit for computing deduction under Section 80-IA. The notional carry forward provision under Section 80-IA(5) applies only to unabsorbed depreciation or losses that have not yet been absorbed.
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'.
Disallowance under Section 14A for interest expenditure is not justified if an assessee uses its own interest-free funds for investments generating exempt income, and borrowed funds are entirely utilized for business purposes, without evidence of diversion to earn tax-free income.
Expenses incurred in connection with a public issue of shares or debentures are allowable as revenue expenditure eligible for deduction under section 35D of the Income-tax Act. This includes expenses related to Qualified Institutional Buyers (QIBs).
Deductions under Chapter VI-A of the Income Tax Act, such as Section 80-IA, are to be calculated and allowed with reference to the assessee's gross total income, not just business income.
Exemption under sections 11/12 of the Act should not be denied on the basis of the principle of consistency if the facts in the present case are identical to earlier and subsequent assessment years. This applies even when there are allegations of violation of provisions of section 13 of the Act.
The principle of consistency mandates that if an assessee's facts in earlier and subsequent assessment years are identical to the year under consideration, they should not be denied exemption under sections 11/12 of the Act.
Profits eligible for deduction under Section 80-IB are calculated after adjusting for disallowances made under Section 40(a)(ia). Any disallowances under Section 40A(3) are added back to the profits for the purpose of determining the deduction under Section 80-IB.
