Section 80IA(10) of the Income Tax Act
Income-tax Act, 2025: s.138
Section 80IA(10) falls under section 80IA of the Income-tax Act, 1961, which corresponds to section 138 (Deductions in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development, etc) of the Income-tax Act, 2025.
Read section 138 of the 2025 Act
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 80IA(10) is Digital Equipment India Ltd. v. DCIT (103 TTJ 329), cited in 27 of the 93 judgments on BharatTax that turn on this section.
Leading authorities on Section 80IA(10)
A mere substantial profit does not inherently indicate an arrangement to earn profits beyond ordinary levels to abuse tax concessions under Section 80-IA(9) or (10). The Assessing Officer must provide specific evidence of such an arrangement.
An Assessing Officer cannot arbitrarily adjust the profit margin of a specific unit by comparing it to the overall profit margin of the assessee, especially when the units have different business natures and separate books of accounts are maintained.
Disallowance under section 14A of the Income Tax Act is justified when the Assessing Officer records dissatisfaction with the assessee's claim that no expenditure was incurred.
The Assessing Officer cannot invoke provisions related to profit attribution or adjustment under section 80IA(9) (analogous to 80IA(8) and 80IA(10)) without material evidence to show an arrangement between the assessee and associated enterprises that resulted in profits exceeding what might be ordinarily expected.
Extraordinary profits alone do not prove an "arranged" manner for claiming higher deductions under Section 10A; the Assessing Officer must prove an arrangement between parties that resulted in such profits.
