Bombay HC allows deduction under Section 80-IA(4) for infrastructure development activities, affirming eligibility of eligible projects.
Bombay HC: Infrastructure Development Eligible for Section 80-IA(4) Deduction
The Bombay High Court has upheld the eligibility of a taxpayer’s infrastructure development activities for deduction under Section 80-IA(4) of the Income Tax Act, 1961. The ruling clarifies that projects meeting the criteria under the Notification issued under the section qualify for tax incentives, irrespective of ancillary commercial components.
The Assessing Officer had denied the deduction, arguing that the project did not exclusively serve public infrastructure or involved partial private benefit. The Court, however, relied on the statutory notification and the project’s approval by competent authorities, holding that as long as the core activity aligns with the notified infrastructure categories, the deduction must be granted.
The determination of eligibility under Section 80-IA(4) rests on fulfilment of conditions in the relevant Notification, not on subjective assessment of public benefit.
This decision strengthens investor confidence in infrastructure incentives. Practitioners should document conformity with notifications and approvals when claiming deductions under Section 80-IA, particularly in public-private partnership models.
Citations
- Section 80-IA(4), Income Tax Act, 1961
