Shital Fibers Limited vs Commissioner of Income Tax

Court

Supreme Court of India

Date

20 May 2025

Case No.

Civil Appeal No. 14318 of 2015

Bench

Abhay S. Oka, Ahsanuddin Amanullah, Augustine George Masih

Citation

[2025] 5 S.C.R. 1248 : 2025 INSC 743

Acts & Sections

Income Tax Act, 1961

Issue for consideration

Deductions claimed cumulatively under the provisions of s.80-HHC and s.80-IA or s.80-IB under Heading ‘C’ of Chapter VI-A, Income Tax Act, 1961, if can be allowed; scope of restriction u/sub-section (9) of s.80-IA, Income Tax Act, 1961 on such deductions claimed.

Headnote

Income Tax Act, 1961 – Chapter VI-A – Heading ‘C’– ss.80-HHC, 80-IA, 80-IB, 80-IA(9) – Deductions u/ss.80-HHC, 80-IA and 80-IB under Heading ‘C’ – Appellant claimed deductions u/s.80-HHC and ss.80-IA, 80-IB, disallowed – Appeal thereagainst dismissed till High Court which held that s.80IA(9) bars claim for deduction under any other provision of Chapter VI-A, if deduction u/s.80-IA has been allowed – Matter before Supreme Court, difference of opinion between two Judges – Matter referred to three judge bench:

Held: On a plain reading of s.80-IA(9), if a deduction of profits and gains u/s.80-IA is claimed and allowed, the deduction to the extent of such profits and gains in any other provision under the heading ‘C’ is not allowed – The deduction to the extent allowed u/s.80-IA cannot be allowed under any other provision under heading ‘C’ – s.80-IA(9), on its plain reading, does not provide that when a deduction is allowed u/s.80-IA, while considering the claim for deduction under any of the provision under heading ‘C’, the deduction allowed u/s. 80-IA should be deducted from the gross total income – The restriction under sub-section (9) of s. 80-IA is not on computing the total gross income – It restricts deduction under any other provision under heading ‘C’ to the extent of the deduction claimed u/s.80-IA – s.80-IA(9) does not affect the computability of deduction under various provisions under heading C of Chapter VI-A, but it affects the allowability of deductions computed under various provisions under heading C of Chapter VI-A, so that the aggregate deduction u/s.80-IA and other provisions under heading C of Chapter VI-A do not exceed 100 per cent of the profits of the business of the assessee – Reference answered. [Paras 20-22, 24]

Judgment Abhay S. Oka, J. 1. This group of appeals/petitions has been referred to a Bench of three Judges in view of the Order dated 10th December, 2015 in Assistant Commissioner of Income Tax, Bangalore v. Micro Labs Limited1 which records difference of opinion between two Hon’ble Judges of this Court. (2015) 17 SCC 96 2. For the sake of convenience, we are referring to facts of the case in Civil Appeal No. 14318 of 2015. We may note here that some of the appeals in the group have been disposed of by the Order dated 01st August, 2024 due to low tax effect. FACTUAL ASPECT 3. We are refer

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