CIT v. Sterling Foods

237 ITR 579Supreme Court of India1999#247 most cited

What is CIT v. Sterling Foods authority for?

Income eligible for profit-linked deductions under sections like 80-IC or 10B must have a direct nexus to the eligible business activity or be derived from the industrial undertaking itself, and not merely attributable to it or arising from a post-manufacturing event.

311

judgments rely on this decision, according to BharatTax’s citation analysis of 367,518 Indian tax judgments — from 2007 to 2026.

Also referred to as

CIT v. Sterling Foods · 237 ITR 579 · section 80-IC · section 10B · profit-linked deductions · direct nexus · derived from industrial undertaking · eligible business activity · post-manufacturing event · income eligibility for deductions

Also reported as

104 Taxmann 204

Sections most often in play

Section 143(3)Section 115JBSection 80IBSection 14ASection 37(1)Section 80ICSection 92CASection 80HH
Read the full judgment

Issues it is cited on

section 80hsection 80hheligible businesssection 80ibdeduction under section 80iasection 80hhcsection 80isection 80icsection 80iadeduction u/s 80iagross total incomewritten down value

Judgments citing CIT v. Sterling Foods

Endress + Hauser Flowtec (India) Pvt. Ltd., Aurangabad vs. Assistant Commissioner of Income-Tax

In the result, appeal of the assessee is partly allowed for

ITA 995/PUN/2016[2008-09]Status: DisposedITAT Pune23 May 2018AY 2008-09

Bench: Shri D.Karunakara Rao, Am & Shri Vikas Awasthy, Jm आयकर आयकर अपील आयकर आयकर अपील अपील संसंसंसं. / Ita No.949/Pun/2016 अपील िनधा"रण िनधा"रण वष" िनधा"रण िनधा"रण वष" वष" / Assessment Year : 2010-11 वष"

For Appellant: Shri Abhay AvchatFor Respondent: Shri Mukesh Jha, JCIT
Section 10BSection 271(1)(c)

…ncome. The assessee has treated the said income as business income and claimed deduction u/s.10B of the Act. CIT(A) relying on the judgment of Apex Court in the case of Pandian Chemicals Ltd. 262 ITR 278, Liberty India 317 ITR 218 and CIT Vs. Sterling Foods 237 ITR 579 denied the claim of the assessee. 24. Aggrieved with such confirmation, assessee filed the present appeal before the Tribunal. 25. Regarding the issues of claim of deduction u/s.10B of the Act, Ld. Counsel for the assessee filed the following submissions: “The AO has reduced following as income from other sources instead of income from busin…

Deputu Commissioner of Income-Tax vs. M/S. Endress + Hauser Flowtec (India) P.Ltd., Aurangabad

In the result, appeal of the assessee is partly allowed for

ITA 949/PUN/2016[2010-11]Status: DisposedITAT Pune23 May 2018AY 2010-11

Bench: Shri D.Karunakara Rao, Am & Shri Vikas Awasthy, Jm आयकर आयकर अपील आयकर आयकर अपील अपील संसंसंसं. / Ita No.949/Pun/2016 अपील िनधा"रण िनधा"रण वष" िनधा"रण िनधा"रण वष" वष" / Assessment Year : 2010-11 वष"

For Appellant: Shri Abhay AvchatFor Respondent: Shri Mukesh Jha, JCIT
Section 10BSection 271(1)(c)

…ncome. The assessee has treated the said income as business income and claimed deduction u/s.10B of the Act. CIT(A) relying on the judgment of Apex Court in the case of Pandian Chemicals Ltd. 262 ITR 278, Liberty India 317 ITR 218 and CIT Vs. Sterling Foods 237 ITR 579 denied the claim of the assessee. 24. Aggrieved with such confirmation, assessee filed the present appeal before the Tribunal. 25. Regarding the issues of claim of deduction u/s.10B of the Act, Ld. Counsel for the assessee filed the following submissions: “The AO has reduced following as income from other sources instead of income from busin…

Asstt.Commissioner of Income Tax, Ludhiana vs. M/S Mrs.Bectors Food Specilties Ltd, Ludhiana

ITA 559/CHANDI/2017[2013-14]Status: DisposedITAT Chandigarh21 May 2018AY 2013-14

Bench: Smt. Diva Singh & Dr. B.R.R. Kumar

For Appellant: Sh. Subhash AggarwalFor Respondent: Smt. Chandrakanta
Section 14ASection 36Section 80I

…s exempted only which is derived by an undertaking from the business of manufacturing or producing any article or thing not prohibited by thirteenth schedule of the Income Tax Act, 1961. It has been held by the Hon'ble Supreme Court in CIT vs. Sterling Foods (237 ITR 579) that the expression 'profits and gains derived from' have been used deliberately by the legislature as the intention was to cover only those receipts which accrued due to actual conduct of the business. Had the intention of legislature been to cover receipts from other sources as well, then instead of using the words,' profits and gains derived…

Asstt.Commissioner of Income Tax, Ludhiana vs. M/S Mrs.Bectors Food Specilties Ltd, Ludhiana

ITA 558/CHANDI/2017[2012-13]Status: DisposedITAT Chandigarh21 May 2018AY 2012-13

Bench: Smt. Diva Singh & Dr. B.R.R. Kumar

For Appellant: Sh. Subhash AggarwalFor Respondent: Smt. Chandrakanta
Section 14ASection 36Section 80I

…s exempted only which is derived by an undertaking from the business of manufacturing or producing any article or thing not prohibited by thirteenth schedule of the Income Tax Act, 1961. It has been held by the Hon'ble Supreme Court in CIT vs. Sterling Foods (237 ITR 579) that the expression 'profits and gains derived from' have been used deliberately by the legislature as the intention was to cover only those receipts which accrued due to actual conduct of the business. Had the intention of legislature been to cover receipts from other sources as well, then instead of using the words,' profits and gains derived…

Asstt.Commissioner of Income Tax, Ludhiana vs. M/S Mrs.Bectors Food Specilties Ltd, Ludhiana

ITA 557/CHANDI/2017[2011-12]Status: DisposedITAT Chandigarh21 May 2018AY 2011-12

Bench: Smt. Diva Singh & Dr. B.R.R. Kumar

For Appellant: Sh. Subhash AggarwalFor Respondent: Smt. Chandrakanta
Section 14ASection 36Section 80I

…s exempted only which is derived by an undertaking from the business of manufacturing or producing any article or thing not prohibited by thirteenth schedule of the Income Tax Act, 1961. It has been held by the Hon'ble Supreme Court in CIT vs. Sterling Foods (237 ITR 579) that the expression 'profits and gains derived from' have been used deliberately by the legislature as the intention was to cover only those receipts which accrued due to actual conduct of the business. Had the intention of legislature been to cover receipts from other sources as well, then instead of using the words,' profits and gains derived…

Asstt.Commissioner of Income Tax, Ludhiana vs. M/S Mrs.Bectors Food Specilties Ltd, Ludhiana

ITA 556/CHANDI/2017[2010-11]Status: DisposedITAT Chandigarh21 May 2018AY 2010-11

Bench: Smt. Diva Singh & Dr. B.R.R. Kumar

For Appellant: Sh. Subhash AggarwalFor Respondent: Smt. Chandrakanta
Section 14ASection 36Section 80I

…s exempted only which is derived by an undertaking from the business of manufacturing or producing any article or thing not prohibited by thirteenth schedule of the Income Tax Act, 1961. It has been held by the Hon'ble Supreme Court in CIT vs. Sterling Foods (237 ITR 579) that the expression 'profits and gains derived from' have been used deliberately by the legislature as the intention was to cover only those receipts which accrued due to actual conduct of the business. Had the intention of legislature been to cover receipts from other sources as well, then instead of using the words,' profits and gains derived…

Asstt.Commissioner of Income Tax, Ludhiana vs. M/S Mrs.Bectors Food Specilties Ltd, Ludhiana

ITA 555/CHANDI/2017[2007-08]Status: DisposedITAT Chandigarh21 May 2018AY 2007-08

Bench: Smt. Diva Singh & Dr. B.R.R. Kumar

For Appellant: Sh. Subhash AggarwalFor Respondent: Smt. Chandrakanta
Section 14ASection 36Section 80I

…s exempted only which is derived by an undertaking from the business of manufacturing or producing any article or thing not prohibited by thirteenth schedule of the Income Tax Act, 1961. It has been held by the Hon'ble Supreme Court in CIT vs. Sterling Foods (237 ITR 579) that the expression 'profits and gains derived from' have been used deliberately by the legislature as the intention was to cover only those receipts which accrued due to actual conduct of the business. Had the intention of legislature been to cover receipts from other sources as well, then instead of using the words,' profits and gains derived…

ACIT, Ludhiana vs. M/S Mrs. Bectors Food Specialties Pvt. Ltd., Ludhiana

ITA 405/CHANDI/2017[2008-09]Status: DisposedITAT Chandigarh21 May 2018AY 2008-09

Bench: Smt. Diva Singh & Dr. B.R.R. Kumar

For Appellant: Sh. Subhash AggarwalFor Respondent: Smt. Chandrakanta
Section 14ASection 36Section 80I

…s exempted only which is derived by an undertaking from the business of manufacturing or producing any article or thing not prohibited by thirteenth schedule of the Income Tax Act, 1961. It has been held by the Hon'ble Supreme Court in CIT vs. Sterling Foods (237 ITR 579) that the expression 'profits and gains derived from' have been used deliberately by the legislature as the intention was to cover only those receipts which accrued due to actual conduct of the business. Had the intention of legislature been to cover receipts from other sources as well, then instead of using the words,' profits and gains derived…

ACIT, Ludhiana vs. M/S Vardhman Textiles Ltd., Ludhiana

In the result appeals of the Assessee and the Revenue are partly allowed

ITA 575/CHANDI/2009[2005-06]Status: DisposedITAT Chandigarh04 May 2018AY 2005-06

Bench: Smt. Diva Singh & Dr. B.R.R. Kumarassessment Year: 2002-03

For Appellant: Shri. Subhash AggarwalFor Respondent: Sh. Ashish Abrol
Section 10BSection 14ASection 80H

…profits derived from the business. Regarding DEPB the Assessing Officer held that they are export incentives and not derived from the Industrial undertakings. The Assessing Officer relied on the decision of Hon’ble Supreme Court in the case of Sterling Foods 237 ITR 579. 14.2 The CIT(A) held against the assessee that DEPB is not covered as profits derived from industrial undertaking and also the rent receipt. The Ld. CIT(A) relied on the decision of the jurisdictional High Court in the case of Liberty India Ltd 207 CTR 243. 14.3 Before us, Ld. DR relied on the decision of Sterling Foods 237 ITR 579 whereas Ld. A…

M/S Vardhman Textiles Ltd., Ludhiana vs. Addl. CIT, Ludhiana

In the result appeals of the Assessee and the Revenue are partly allowed

ITA 528/CHANDI/2009[2005-06]Status: DisposedITAT Chandigarh04 May 2018AY 2005-06

Bench: Smt. Diva Singh & Dr. B.R.R. Kumarassessment Year: 2002-03

For Appellant: Shri. Subhash AggarwalFor Respondent: Sh. Ashish Abrol
Section 10BSection 14ASection 80H

…profits derived from the business. Regarding DEPB the Assessing Officer held that they are export incentives and not derived from the Industrial undertakings. The Assessing Officer relied on the decision of Hon’ble Supreme Court in the case of Sterling Foods 237 ITR 579. 14.2 The CIT(A) held against the assessee that DEPB is not covered as profits derived from industrial undertaking and also the rent receipt. The Ld. CIT(A) relied on the decision of the jurisdictional High Court in the case of Liberty India Ltd 207 CTR 243. 14.3 Before us, Ld. DR relied on the decision of Sterling Foods 237 ITR 579 whereas Ld. A…

ACIT, Ludhiana vs. M/S Vardhman Textiles Ltd., Ludhiana

In the result appeals of the Assessee and the Revenue are partly allowed

ITA 981/CHANDI/2008[2004-05]Status: DisposedITAT Chandigarh04 May 2018AY 2004-05

Bench: Smt. Diva Singh & Dr. B.R.R. Kumarassessment Year: 2002-03

For Appellant: Shri. Subhash AggarwalFor Respondent: Sh. Ashish Abrol
Section 10BSection 14ASection 80H

…profits derived from the business. Regarding DEPB the Assessing Officer held that they are export incentives and not derived from the Industrial undertakings. The Assessing Officer relied on the decision of Hon’ble Supreme Court in the case of Sterling Foods 237 ITR 579. 14.2 The CIT(A) held against the assessee that DEPB is not covered as profits derived from industrial undertaking and also the rent receipt. The Ld. CIT(A) relied on the decision of the jurisdictional High Court in the case of Liberty India Ltd 207 CTR 243. 14.3 Before us, Ld. DR relied on the decision of Sterling Foods 237 ITR 579 whereas Ld. A…

Vardhman Textiles Ltd., Ludhiana vs. JCIT, Ludhiana

In the result appeals of the Assessee and the Revenue are partly allowed

ITA 938/CHANDI/2008[2004-05]Status: DisposedITAT Chandigarh04 May 2018AY 2004-05

Bench: Smt. Diva Singh & Dr. B.R.R. Kumarassessment Year: 2002-03

For Appellant: Shri. Subhash AggarwalFor Respondent: Sh. Ashish Abrol
Section 10BSection 14ASection 80H

…profits derived from the business. Regarding DEPB the Assessing Officer held that they are export incentives and not derived from the Industrial undertakings. The Assessing Officer relied on the decision of Hon’ble Supreme Court in the case of Sterling Foods 237 ITR 579. 14.2 The CIT(A) held against the assessee that DEPB is not covered as profits derived from industrial undertaking and also the rent receipt. The Ld. CIT(A) relied on the decision of the jurisdictional High Court in the case of Liberty India Ltd 207 CTR 243. 14.3 Before us, Ld. DR relied on the decision of Sterling Foods 237 ITR 579 whereas Ld. A…

ACIT, Ludhiana vs. M/S Vardhman Textiles Ltd., Ludhiana

In the result appeals of the Assessee and the Revenue are partly allowed

ITA 530/CHANDI/2008[2003-04]Status: DisposedITAT Chandigarh04 May 2018AY 2003-04

Bench: Smt. Diva Singh & Dr. B.R.R. Kumarassessment Year: 2002-03

For Appellant: Shri. Subhash AggarwalFor Respondent: Sh. Ashish Abrol
Section 10BSection 14ASection 80H

…profits derived from the business. Regarding DEPB the Assessing Officer held that they are export incentives and not derived from the Industrial undertakings. The Assessing Officer relied on the decision of Hon’ble Supreme Court in the case of Sterling Foods 237 ITR 579. 14.2 The CIT(A) held against the assessee that DEPB is not covered as profits derived from industrial undertaking and also the rent receipt. The Ld. CIT(A) relied on the decision of the jurisdictional High Court in the case of Liberty India Ltd 207 CTR 243. 14.3 Before us, Ld. DR relied on the decision of Sterling Foods 237 ITR 579 whereas Ld. A…

Vardhman Textile Ltd., Ludhiana vs. ACIT, Ludhiana

In the result appeals of the Assessee and the Revenue are partly allowed

ITA 475/CHANDI/2008[2003-04]Status: DisposedITAT Chandigarh04 May 2018AY 2003-04

Bench: Smt. Diva Singh & Dr. B.R.R. Kumarassessment Year: 2002-03

For Appellant: Shri. Subhash AggarwalFor Respondent: Sh. Ashish Abrol
Section 10BSection 14ASection 80H

…profits derived from the business. Regarding DEPB the Assessing Officer held that they are export incentives and not derived from the Industrial undertakings. The Assessing Officer relied on the decision of Hon’ble Supreme Court in the case of Sterling Foods 237 ITR 579. 14.2 The CIT(A) held against the assessee that DEPB is not covered as profits derived from industrial undertaking and also the rent receipt. The Ld. CIT(A) relied on the decision of the jurisdictional High Court in the case of Liberty India Ltd 207 CTR 243. 14.3 Before us, Ld. DR relied on the decision of Sterling Foods 237 ITR 579 whereas Ld. A…

ACIT, Ludhiana vs. Vardhman Textiles Ltd., Ludhiana

In the result appeals of the Assessee and the Revenue are partly allowed

ITA 691/CHANDI/2007[2002-03]Status: DisposedITAT Chandigarh04 May 2018AY 2002-03

Bench: Smt. Diva Singh & Dr. B.R.R. Kumarassessment Year: 2002-03

For Appellant: Shri. Subhash AggarwalFor Respondent: Sh. Ashish Abrol
Section 10BSection 14ASection 80H

…profits derived from the business. Regarding DEPB the Assessing Officer held that they are export incentives and not derived from the Industrial undertakings. The Assessing Officer relied on the decision of Hon’ble Supreme Court in the case of Sterling Foods 237 ITR 579. 14.2 The CIT(A) held against the assessee that DEPB is not covered as profits derived from industrial undertaking and also the rent receipt. The Ld. CIT(A) relied on the decision of the jurisdictional High Court in the case of Liberty India Ltd 207 CTR 243. 14.3 Before us, Ld. DR relied on the decision of Sterling Foods 237 ITR 579 whereas Ld. A…

M/S Vardhman Textiles Ltd., Ludhiana vs. ACIT, Ludhiana

In the result appeals of the Assessee and the Revenue are partly allowed

ITA 681/CHANDI/2007[2002-03]Status: DisposedITAT Chandigarh04 May 2018AY 2002-03

Bench: Smt. Diva Singh & Dr. B.R.R. Kumarassessment Year: 2002-03

For Appellant: Shri. Subhash AggarwalFor Respondent: Sh. Ashish Abrol
Section 10BSection 14ASection 80H

…profits derived from the business. Regarding DEPB the Assessing Officer held that they are export incentives and not derived from the Industrial undertakings. The Assessing Officer relied on the decision of Hon’ble Supreme Court in the case of Sterling Foods 237 ITR 579. 14.2 The CIT(A) held against the assessee that DEPB is not covered as profits derived from industrial undertaking and also the rent receipt. The Ld. CIT(A) relied on the decision of the jurisdictional High Court in the case of Liberty India Ltd 207 CTR 243. 14.3 Before us, Ld. DR relied on the decision of Sterling Foods 237 ITR 579 whereas Ld. A…

Pragati Aroma Oil Distillers (P) Ltd, Mumbai vs. DCIT 4(3), Mumbai

In the result appeal of the assessee is partly allowed and appeal of the Revenue stood dismissed

ITA 923/MUM/2016[2011-12]Status: DisposedITAT Mumbai04 Apr 2018AY 2011-12

Bench: Shri Mahavir Singh & Shri Ramit Kocharआयकर अपीऱ सं./I.T.A. No.923/Mum/2016 (नििाारण वर्ा / Assessment Year: 2011-12) बिाम/ Pragati Aroma Oil Distillers Dcit 4(3) (P) Ltd., 206 Anand Bhavan, R.No. 649, 6 T H Floor, 17 Babugenu Road, Aaykar Bhavan, V. Princess Street, M K Road, Marine Lines, Mumbai-400020 Mumbai 400002 स्थायी ऱेखा सं./ Pan : Aaacp2213P (अपीऱाथी /Appellant) (प्रत्यथी / Respondent) ..

For Appellant: Shri. Mahaveer JainFor Respondent: Shri. Rajat Mittal
Section 10Section 10BSection 143(3)Section 14ASection 80I

…16 I.T.A. No.319/Mum/2016 the assessee was required to open a Letter of Credit. On such Deposit, the assessee earned interest. Under the said circumstances, the High Court held, following the judgment of this Court in the case of CIT v. Sterling Foods [1999] 237 ITR 579/ 104 Taxman 204, that the interest received by the assessee was on deposit made by it in the Banks; that such deposit was the source of income; and that, the mere fact that the deposit was made for obtaining Letter of Credit which Letter was, in turn, used for the purpose of business undertaking did not establish a direct nexus between the intere…

Goodricke Group Limited, Kolkata vs. DCIT, Cir-4(1), Kolkata

In the result, appeal of the assessee is allowed

ITA 309/KOL/2015[2002-2003]Status: DisposedITAT Kolkata14 Mar 2018AY 2002-2003

Bench: "ी पी.एम .जगताप, लेखा सद"य एवं/And "ी ऐ. ट". वक", "यायीक सद"य) [Before Shri P. M. Jagtap, Am & Shri A. T. Varkey, Jm]

Section 10Section 33A

…ng period. Rule only fixed the rate of conversion of foreign currency. If there is no foreign currency to convert on the last date of accounting period, then no question of invoking rule 115 will arise . . . In case of CIT v. Sterling Foods reported in [1999] 237 ITR 579 (SC), the court held that the facts were that the assessee was engaged in the processing of prawns and sea food and exporting it. In the process the assessee earned import entitlements granted by the Government of India under Export Promotion Scheme. The assessee could use such import entitlements itself or sell the same to others. The assessee s…

Opera Clothing, Mumbai vs. ACIT 18(1), Mumbai

In the result, both the appeals of the assessee are dismissed

ITA 917/MUM/2016[2008-09]Status: DisposedITAT Mumbai06 Mar 2018AY 2008-09

Bench: Shri B.R. Baskaran (Am)& Shri Pawan Singh (Jm)

Section 154Section 80HSection 80I

…eived is related to the Export promotion Scheme floated by the Government and cannot be considered as actual reimbursement of Excise duty as canvassed by the assessee. He submitted that the Hon’ble Supreme Court has held in the case of CIT Vs. Sterling Foods (237 ITR 579) that the source for the import entitlements is the Export promotion Scheme of the Central Government and hence the nexus 3 M/s. Opera Clothing between the incentives and industrial undertaking is not direct but only incidental. 6. Having heard rival contentions, we do not find any merit in the contentions of the assessee. Admittedly, the duty…

Sahana Jewellery Exports Private Limited, Coimbatore vs. DCIT Corporate Circle 1, Coimbatore

In the result, the appeal of the assessee stands dismissed

ITA 1814/CHNY/2017[2013-14]Status: DisposedITAT Chennai16 Feb 2018AY 2013-14

Bench: Shri Abraham P. George & Shri Duvvuru Rl Reddy] आयकर अपील सं./I.T.A. No.1814/Chny/2017 "नधा"रण वष" /Assessment Year : 2013-2014. M/S. Sahana Jewellery Exports Vs. The Deputy Commissioner Of Private Limited, Income Tax, 600, Raja Street, Corporate Circle 1, Coimbatore 641 001. Coimbatore. [Pan Aaecs 7045N] (अपीलाथ"/Appellant) (""यथ"/Respondent)

For Respondent: Shri. R.U. Aroon Prasad, IRS, JCIT
Section 10A

…आयकर अपील"य अ"धकरण, ‘बी’ "यायपीठ, चे"नई IN THE INCOME TAX APPELLATE TRIBUNAL, ‘B’ BENCH : CHENNAI "ी अ"ाहम पी. जॉज", लेखा सद"य एवं "ी धु"वु" आर.एल रे"डी, "या"यक सद"य के सम" । [BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER] आयकर अपील सं./I.T.A. No.1814/CHNY/2017 "नधा"रण वष" /Assessment year : 2013-2014. M/s. Sahana Jewellery Exports Vs. The Deputy Commissioner of Private Limited, Income Tax, 600, Raja Street, Corporate Circle 1, Coimbatore 641 001. Coimbatore. [PAN AAECS 7045N] (अपीलाथ"/Appellant) (""यथ"/Respondent) : Shri. L.Shibi, C.A. अपीलाथ" क" ओर से/ Appellant…