Bombay HC Rules Basis for Infrastructure Fee Deduction Must Be Actual Receipts, Not Gross Advertising Bills

The Bombay High Court ruled that infrastructure fee deductions under Section 80-IA must be based on actual receipts, not gross advertising bills. The judgment quashed an assessment disallowing ₹7.2 crore deductions claimed by an advertising firm on accrued (but unrealized) revenues. The court emphasized that the term "derived from" in deduction provisions requires direct nexus with actual income, not merely contractual rights. This impacts infrastructure companies claiming deductions on accrual basis before actual payment realization. The ruling clarifies that mere billing doesn't entitle to deductions - actual receipt is necessary. Tax authorities were directed to recompute deductions after verifying cash flows rather than invoice amounts. This brings consistency to Section 80-IA claims amid conflicting interpretations by different benches. Companies must now align their deduction claims with actual payment receipts rather than accounting accruals.