Deduction availability - telecom company

[subhash gupta]

whether a company providing telecomunication servies is entitle for deduction of income earned from trading activites of equipments required for providing telecommunication services in addition to income earned from telecommunication services under section 80-IA(4)(ii) of Income Tax Act, 1961.

[Surender Gupta]

Under section 80-IA subsection (1) read with sub section (4, deduction is allowed only for eligible business. Further as per sub section (10) AO has power to calculate the profit of eligible business and to exclude the income of ineligible business.

AI Summary

Deduction entitlement for telecom companies: only income from the eligible business qualifies; assessing officer may exclude trading income. Deductions are confined to income of the eligible business; income from non qualifying trading activities does not qualify. The assessing officer may calculate and apportion profits of the eligible business and exclude income attributable to ineligible activities when determining the allowable deduction.