“Section 80(2)(iii)”
The decision most relied on for Section 80(2)(iii) is CIT v. Karnal Co-operative Sugar Mills Ltd. (243 ITR 2), cited in 125 judgments on BharatTax.
Leading authorities on Section 80(2)(iii)
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'.
Disallowance under Section 14A read with Rule 8D(2)(iii) does not apply to long-term investments, including those in subsidiary/group concerns or strategic investments, and such investments should be excluded from the calculation.
Contracts involving development, operation, maintenance, financial involvement, and defect correction are eligible for deduction under section 80-IA(4), even when allotted by government bodies. Such contracts are not considered simple works contracts for the purpose of denying this deduction.
