Subscribe to the Bombay Chartered Accountant Journal Subscribe Now!

October 2025

Deduction u/s. 80-IA :— (A) Interest on FD — Funds kept aside periodically by way of FD — Obligation under the license agreement to replace cranes after a certain period — Funds parked in FD to meet contractual obligation — Funds were also parked in FD under a compliance order of the High Court due to a tariff dispute between the assessee and TAMP — Placement of FD imperative for the business — FD was not created for parking of surplus funds — Interest is eligible for deduction u/s. 80-IA: (B) Interest on TDS refund — TDS wrongly deducted by customers — TDS was directly part of sales receipt of the assessee — Interest on TDS refund arose due to excess TDS deducted by the customers against the payment to be made to the assessee — TDS was part of business receipt of the assessee — Assessee entitled to deduction u/s. 80-IA on interest received by it on TDS refunded to it.

By Keshav Bhujle | Ritu Punjabi, Advocates
Reading Time 5 mins

38. [2025] 177 taxmann.com 707 (Bom.)

Gateway Terminals India (P.) Ltd. vs. DCIT

A. Y. 2012-13 Date of order 26/08/2025

S. 80-IA of ITA 1961

Deduction u/s. 80-IA :— (A) Interest on FD — Funds kept aside periodically by way of FD — Obligation under the license agreement to replace cranes after a certain period — Funds parked in FD to meet contractual obligation — Funds were also parked in FD under a compliance order of the High Court due to a tariff dispute between the assessee and TAMP — Placement of FD imperative for the business — FD was not created for parking of surplus funds — Interest is eligible for deduction u/s. 80-IA:

(B) Interest on TDS refund — TDS wrongly deducted by customers — TDS was directly part of sales receipt of the assessee — Interest on TDS refund arose due to excess TDS deducted by the customers against the payment to be made to the assessee — TDS was part of business receipt of the assessee — Assessee entitled to deduction u/s. 80-IA on interest received by it on TDS refunded to it.

The assessee, a joint venture company, was engaged in the business of operating and maintaining

Read More
Download PDF

You May Also Like

Charitable institution — Exemption u/s. 11 — Charitable purpose — Applicability of proviso to s. 2(15) — Donations received from donors after deducting an amount shown as deduction of tax at source u/s. 194C and 194J — AO treating receipts as consultancy fees and contractual income based on deduction of tax at source rejected exemption u/s. 11 — Assessee’s revision petition u/s. 264 was rejected — Held, proviso to s. 2(15) cannot be invoked alleging that services rendered in relation to trade, commerce or business — Provison under which donor deducted tax alone could not determine nature of receipt — No element of trade, commerce or business activity established — Assessee is entitled to exemption — Assessment order and order rejecting revision petition set aside.

General Anti-Avoidance Rules — Scope of —Impermissible Avoidance Agreement — Purchase and sale of shares — Cumulative effect of purchase and sale of shares results in loss — No strong material established by the Department to show applicability of s. 96(1) except the timing of transaction — GAAR provisions not applicable — Order passed u/s. 144BA(6) set-aside.