· In these cases, the common question that was sought to be urged in all these appeals by the Revenue was whether the ITAT had erred in interpreting Section 80-IA(2A) of the Income Tax Act, 1961.
· The Revenue was aggrieved by the decision of the ITAT that the first degree nexus implicit in the words "derived from" used in section 80IA is not required for computation of deduction in the case of an undertaking engaged in providing telecommunication services, since the words "derived from" do not occur in sub-section (2A) of Section 80IA.
· The Hon’ble Court, however, has held that the decision of the ITAT in allowing the deduction u/s 80IA of the Act to the assessee company is correct. The Court has held that the legislature does not intends that an assessee falling under the provisions of section 80IA(2A) may meet the stringent requirement that the profits so contemplated may be “derived from” the said business.
· The Court has further held that the requirements of the first degree nexus of the profits from the eligible business does not come into play under the provisions of section 80IA.
For further reading, refer the attachment.
Further Reading