Supreme Court of India

Commissioner of Income Tax v. M/s. Meghalaya Steels Ltd.

Neutral citation

Reported as [2016] 1 S.C.R. 952

Bench Kurian Joseph and Rohinton Fali Narjman JJ.

Decided 9 March 2016

INSC stands for INDIAN SUPREME COURT. A neutral citation scheme assigned by the Court itself, so a judgment can be cited without depending on a commercial law reporter. INSC is the neutral citation scheme assigned by the Supreme Court, so a judgment can be cited without depending on a commercial law reporter.

2 Supreme Court benches have cited this judgment.

What the Court ordered

We are of the view that the Gauhati, Calcutta and Delhi High Courts have correctly construed Sections 80-IB and 80-IC. The Himachal Pradesh High Court, having wrongly interpreted the judgments in Sterling Foods and Liberty India to arrive at the opposite conclusion, is held to be wrongly decided for the reasons given by us hereinabove.

Judgment, page 21

From the headnote

Income Tax Act; 1961: ss.80IB, 80IC - Deduction under - Subsidies - Transport/Interest/Power/Insurance subsidy - Held: Eligible for deduction - These subsidies are revenue receipts which are reimbursed to the assessee for elements of cost relating to manufacture or sale of their products, there can certainly be said to be a direct nexus between profits and gains of the industrial undertaking or business, and reimbursement of such subsidies. Dismissing the appeals, the Court HELD: 1. The judgment in *Sterling Foods lays down a very important test in order to determine Whether profits and gains

Authorities it was built on

1981 K.P. Varghese v. The Income-tax Officer, Ernakulam, and Another cited by 29
1997 M/s. Sahney Steel and Press Works Ltd., Hyderabad Etc, Etc. v. Commissioner of Income Tax, Andhra Pradesh-i, Hyderabad cited by 2
1999 Commissioner of Income Tax, Karnataka v. Sterling Foods, Mangalore cited by 2

Where later benches applied it

2026 M/s Jindal Equipment Leasing Consultancy Services Ltd. v. Commissioner of Income Tax referred to
2023 M/s. Saraf Exports v. Commissioner of Income Tax, Jaipur-iii referred to

Of those, 2 referred to

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