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2019 (1) TMI 472 - HC - Income TaxDisallowance u/s 80IA - income from sharing fibre cables and cell sites is not derived from the undertaking of telecommunication business - Held that:- In view of language of clause (ii) to sub-section (4) to Section 80IA, which states that for the purpose of the said clause an undertaking shall be treated as providing telecommunication services, if it is engaged in basic or cellular, including radio paging, domestic satellite services, network of trunking, broadband network, and internet services within the two dates, the income by the assessee from third parties who had availed of the telecommunication services, in the form of payments received by the assessee from third persons for using fibre cables and cell towers network qualifies for deduction under Section 80IA. This income or receipts have to be treated as income earned by the undertaking from ‘telecommunication services’. Assessee had also paid bank charges as cheques issued by some of the customers had been dishonoured. The cheque bounce charges were also levied to the customers but entire amount could not be recovered. AO held that late payment charges or cheque bouncing charges was in the nature of penalty and was not income derived from telecommunication business by referring to the judgments defining the scope and ambit of the expression “income derived from”. We have already noted that the said expression is missing and is not the mandate of the legislature in sub-section (2A) to Section 80IA. As held that the late payment charges or cheque bounce charges were relatable and directly linked with the telecommunication business of the assessee. Further, as noted above, the expression “derived from” is not relevant for claim for computation of deduction under sub-section (2A) to Section 80IA of the Act as held by the Delhi High Court in the case of Bharat Sanchar Nigam Limited [2016 (8) TMI 270 - DELHI HIGH COURT]. We uphold the finding of the Tribunal that income from sharing of fibre cables and cell-sites qualify for deduction under Section 80IA(2A). Tribunal was also right and justified in upholding the reasoning and order of the Commissioner of Income Tax (Appeals) on cheques bouncing and late payment charges.
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