Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

Home Case Index All Cases Income Tax Income Tax + SC Income Tax - 2016 (3) TMI SC This

  • Login
  • Cases Cited
  • Referred In
  • Summary

Forgot password       New User/ Regiser

⇒ Register to get Live Demo



 

2016 (3) TMI 375 - SC - Income Tax


  1. 2023 (4) TMI 420 - SC
  2. 2017 (9) TMI 1819 - SC
  3. 2017 (1) TMI 1298 - SCH
  4. 2016 (4) TMI 1161 - SCH
  5. 2024 (5) TMI 1133 - HC
  6. 2023 (1) TMI 376 - HC
  7. 2022 (9) TMI 1329 - HC
  8. 2022 (7) TMI 498 - HC
  9. 2022 (3) TMI 539 - HC
  10. 2021 (11) TMI 1146 - HC
  11. 2019 (7) TMI 1226 - HC
  12. 2019 (4) TMI 1490 - HC
  13. 2019 (2) TMI 1211 - HC
  14. 2019 (1) TMI 1364 - HC
  15. 2018 (10) TMI 1267 - HC
  16. 2018 (6) TMI 1605 - HC
  17. 2018 (5) TMI 1782 - HC
  18. 2018 (4) TMI 1985 - HC
  19. 2018 (2) TMI 1529 - HC
  20. 2017 (12) TMI 1698 - HC
  21. 2017 (10) TMI 1215 - HC
  22. 2017 (9) TMI 1234 - HC
  23. 2017 (5) TMI 1630 - HC
  24. 2017 (5) TMI 1492 - HC
  25. 2017 (6) TMI 83 - HC
  26. 2017 (4) TMI 1032 - HC
  27. 2017 (4) TMI 627 - HC
  28. 2017 (1) TMI 772 - HC
  29. 2016 (10) TMI 396 - HC
  30. 2016 (9) TMI 110 - HC
  31. 2016 (7) TMI 1374 - HC
  32. 2016 (8) TMI 112 - HC
  33. 2024 (7) TMI 832 - AT
  34. 2024 (1) TMI 1187 - AT
  35. 2024 (3) TMI 1195 - AT
  36. 2024 (1) TMI 1300 - AT
  37. 2024 (1) TMI 996 - AT
  38. 2023 (11) TMI 941 - AT
  39. 2023 (9) TMI 1315 - AT
  40. 2023 (8) TMI 1422 - AT
  41. 2023 (7) TMI 400 - AT
  42. 2023 (10) TMI 687 - AT
  43. 2023 (5) TMI 213 - AT
  44. 2023 (4) TMI 1288 - AT
  45. 2023 (3) TMI 822 - AT
  46. 2023 (2) TMI 341 - AT
  47. 2023 (1) TMI 608 - AT
  48. 2022 (12) TMI 291 - AT
  49. 2022 (11) TMI 774 - AT
  50. 2022 (11) TMI 1340 - AT
  51. 2022 (11) TMI 534 - AT
  52. 2022 (10) TMI 1151 - AT
  53. 2022 (10) TMI 938 - AT
  54. 2022 (9) TMI 653 - AT
  55. 2022 (7) TMI 551 - AT
  56. 2022 (7) TMI 174 - AT
  57. 2022 (6) TMI 1017 - AT
  58. 2022 (6) TMI 350 - AT
  59. 2022 (7) TMI 1134 - AT
  60. 2022 (5) TMI 951 - AT
  61. 2022 (5) TMI 541 - AT
  62. 2022 (3) TMI 919 - AT
  63. 2022 (2) TMI 1203 - AT
  64. 2022 (3) TMI 1011 - AT
  65. 2022 (2) TMI 818 - AT
  66. 2022 (1) TMI 147 - AT
  67. 2021 (11) TMI 98 - AT
  68. 2021 (10) TMI 506 - AT
  69. 2021 (9) TMI 1554 - AT
  70. 2021 (9) TMI 1553 - AT
  71. 2021 (9) TMI 233 - AT
  72. 2021 (9) TMI 124 - AT
  73. 2021 (7) TMI 93 - AT
  74. 2021 (6) TMI 620 - AT
  75. 2021 (4) TMI 1153 - AT
  76. 2021 (3) TMI 265 - AT
  77. 2020 (12) TMI 439 - AT
  78. 2020 (10) TMI 1125 - AT
  79. 2021 (1) TMI 196 - AT
  80. 2020 (3) TMI 422 - AT
  81. 2020 (3) TMI 220 - AT
  82. 2020 (4) TMI 425 - AT
  83. 2019 (12) TMI 1418 - AT
  84. 2020 (1) TMI 217 - AT
  85. 2019 (12) TMI 980 - AT
  86. 2019 (11) TMI 798 - AT
  87. 2019 (9) TMI 380 - AT
  88. 2019 (10) TMI 119 - AT
  89. 2020 (4) TMI 86 - AT
  90. 2019 (8) TMI 1784 - AT
  91. 2019 (6) TMI 921 - AT
  92. 2019 (5) TMI 12 - AT
  93. 2019 (4) TMI 1856 - AT
  94. 2019 (4) TMI 1382 - AT
  95. 2019 (4) TMI 1302 - AT
  96. 2019 (4) TMI 1301 - AT
  97. 2019 (3) TMI 1741 - AT
  98. 2019 (3) TMI 638 - AT
  99. 2019 (2) TMI 1888 - AT
  100. 2019 (2) TMI 47 - AT
  101. 2019 (4) TMI 544 - AT
  102. 2018 (12) TMI 819 - AT
  103. 2018 (11) TMI 1774 - AT
  104. 2018 (11) TMI 635 - AT
  105. 2018 (11) TMI 1628 - AT
  106. 2018 (9) TMI 1791 - AT
  107. 2018 (9) TMI 1957 - AT
  108. 2018 (9) TMI 2118 - AT
  109. 2018 (9) TMI 1011 - AT
  110. 2018 (5) TMI 1967 - AT
  111. 2018 (6) TMI 55 - AT
  112. 2018 (5) TMI 128 - AT
  113. 2018 (2) TMI 1734 - AT
  114. 2018 (2) TMI 250 - AT
  115. 2017 (12) TMI 1758 - AT
  116. 2017 (11) TMI 1767 - AT
  117. 2017 (9) TMI 962 - AT
  118. 2017 (9) TMI 727 - AT
  119. 2017 (9) TMI 1167 - AT
  120. 2017 (8) TMI 1382 - AT
  121. 2017 (6) TMI 828 - AT
  122. 2017 (5) TMI 1567 - AT
  123. 2017 (3) TMI 951 - AT
  124. 2017 (3) TMI 1297 - AT
  125. 2017 (2) TMI 1085 - AT
  126. 2017 (2) TMI 858 - AT
  127. 2017 (2) TMI 551 - AT
  128. 2017 (1) TMI 1435 - AT
  129. 2016 (11) TMI 1721 - AT
  130. 2016 (12) TMI 459 - AT
  131. 2017 (1) TMI 266 - AT
  132. 2016 (6) TMI 1085 - AT
  133. 2016 (6) TMI 257 - AT
  134. 2016 (9) TMI 146 - AT
  135. 2016 (4) TMI 1137 - AT
  136. 2016 (5) TMI 1251 - AT
  137. 2016 (5) TMI 929 - AT
  138. 2016 (4) TMI 591 - AT
  139. 2018 (12) TMI 1599 - NAPA
Issues Involved:
1. Deduction under Sections 80-IB and 80-IC of the Income Tax Act, 1961.
2. Classification of subsidies as revenue receipts and their eligibility for deduction.
3. Interpretation of "profits and gains derived from business" versus "income from other sources".

Detailed Analysis:

1. Deduction under Sections 80-IB and 80-IC of the Income Tax Act, 1961:
The core issue revolves around whether subsidies received by the respondent qualify for deductions under Sections 80-IB and 80-IC. The respondent, engaged in the manufacture of Steel and Ferro Silicon, claimed deductions on subsidies received for transport, interest, and power. The Assessing Officer disallowed these deductions, classifying the subsidies as revenue receipts. The ITAT allowed the respondent's appeal, which was upheld by the Gauhati High Court. The Revenue appealed to the Supreme Court, arguing that subsidies were not directly derived from the business.

2. Classification of Subsidies as Revenue Receipts and Their Eligibility for Deduction:
The Supreme Court examined whether subsidies could be considered as "profits and gains derived from business." The Revenue contended that subsidies, being government grants, lacked a direct nexus with the business of the assessee. They cited various judgments, including Liberty India v. Commissioner of Income Tax, to argue that subsidies should be classified as "income from other sources." The respondent countered that subsidies were intended to reduce costs directly related to manufacturing and selling, thus qualifying as business profits.

3. Interpretation of "Profits and Gains Derived from Business" Versus "Income from Other Sources":
The Court analyzed the language of Sections 80-IB and 80-IC, focusing on the phrase "profits and gains derived from business." It distinguished between "profits attributable to" and "profits derived from" business, emphasizing that the latter requires a direct nexus. The Court referred to Cambay Electric Supply Industrial Company Limited v. Commissioner of Income Tax and Sterling Foods, Mangalore, to elucidate this distinction. It concluded that subsidies reimbursing costs directly related to manufacturing and selling products have a direct nexus with the business, thus qualifying for deductions under Sections 80-IB and 80-IC.

Conclusion:
The Supreme Court upheld the Gauhati High Court's judgment, affirming that subsidies received by the respondent for transport, interest, and power were directly related to the business's manufacturing and selling costs. Consequently, these subsidies qualify for deductions under Sections 80-IB and 80-IC. The Court dismissed the Revenue's appeals, holding that the subsidies should be classified under "profits and gains of business or profession" rather than "income from other sources." The judgments of the Gauhati, Calcutta, and Delhi High Courts were deemed correctly decided, while the Himachal Pradesh High Court's contrary interpretation was held to be incorrect.

 

 

 

 

Quick Updates:Latest Updates