In Brief
This case concerns the extent of deduction allowable under Section 80-IA of the Income Tax Act, 1961 for a power generation company. The question was whether deductions could be allowed against the assessee's gross total income or only against business income. The Supreme Court held that Section 80-IA(5) serves only to determine the quantum of deduction by treating the eligible business as the sole income source for computational purposes, not to restrict the allowance of deduction to business income. Deductions under Section 80-IA can be set-off against gross total income (subject to the statutory ceiling). The Court affirmed that Section 80AB addresses computation of deduction on net income, not restriction of allowance. The Revenue's appeal was dismissed.
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