S.80-IA (5) of Income Tax Act cannot be pressed into service for reading limitation of deduction under sub-section (1) of S.80-IA only to 'business income'

The Assessee claimed that deduction in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development should be allowed to the extent of 'gross total income. But this claim was rejected by the Assessing Officer. Apparently, in the present case, there is no discussion about S.80-IA (5) by the Appellate Authority nor the Tribunal and the High Court.

Profits and gains by an industry entitled to benefit under Section 80-E cannot be reduced by the loss suffered by any other industry or industries owned by the assessee.

The Supreme Court held that “Scope of sub-section (5) of Section 80-IA of the Act is limited to the determination of quantum of deduction under sub-section (1) of Section 80-IA of the Act by treating 'eligible business' as the 'only source of income. Sub-section (5) cannot be pressed into service for reading a limitation of the deduction under sub-section (1) only to 'business income'.”

Appearing counsel/s: Mr. Arijit Prasad, Mr. Ajay Vohra