Business income deduction for interest, subsidies and dividends upheld under section 80P(2)(a)(i) on binding precedent

Interest on securities, Government subsidies and dividend receipts were treated as business income for deduction under section 80P(2)(a)(i) of the Income-tax Act, 1961, because earlier decisions in the same assessee's case had already accepted deduction for interest and subsidies, and dividend income had also been held eligible. The referred question was therefore covered by binding precedent on all three items, and the answer was given in favour of the assessee and against the Department.

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Issues: Whether interest on securities, subsidies received from the Government, and dividends received by the assessee constituted business income eligible for deduction under section 80P(2)(a)(i) of the Income-tax Act, 1961.

Analysis: The same assessee's entitlement to deduction in respect of interest on securities and Government subsidies had already been accepted in earlier decisions, and dividend income was also held to qualify for deduction under the same provision. The question referred was therefore covered by binding precedent on all the three items.

Conclusion: The referred question was answered in the affirmative, holding that all three items were business income entitled to deduction under section 80P(2)(a)(i) of the Income-tax Act, 1961, and the answer was against the Department.

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