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 under section 80-IA applies only to eligible business; trading income from equipment is excludable.
The deduction is available only for the eligible business under the statute; the assessing officer has power to compute profit of the eligible business and to exclude income of an ineligible business, so trading receipts from equipment may be excluded from the deduction.