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

Jindal Drugs Ltd, Mumbai vs. ACIT Cen Cir 8, Mumbai

In the result, appeals filed by the assessee are allowed in part whereas the appeals filed by the Revenue are dismissed

ITA 3818/MUM/2009[2006-07]Status: DisposedITAT Mumbai29 Oct 2015AY 2006-07

Bench: Shri R.C. Sharma & Shri Sandeep Gosainassessment Year: - 2005-06 Jindal Drugs Limited Vs. The Asst. Commissioner Of Bakhtawar, 6Th Floor, B&C, Income Tax, Central Circel 229, Nariman Point, – 8 Aaykar Bhavan, Mumbai – 400 021. M.K. Road, Mumbai – 400 020. Appellant Respondent Pan/Gir No. Aaacj1000A Assessment Year: - 2005-06 The Asst. Commissioner Of Vs.` Jindal Drugs Limited Bakhtawar, 6Th Floor, B&C, Income Tax, Central Circel – 8 229, Nariman Point, Old Cgo Bldg, Annexe, Mumbai – 400 021. M.K. Road, Mumbai – 400 020. Pan/Gir No. Aaacj1000A Appellant Respondent Assessment Year: - 2006-07 Jindal Drugs Limited Vs. The Asst. Commissioner Of Bakhtawar, 6Th Floor, Income Tax, Central Circel – 8, B&C, Aaykar Bhavan, 229, Nariman Point, M.K. Road, Mumbai – 400 020. Mumbai – 400 021. Pan/Gir No. Aaacj1000A Appellant Respondent

Section 143(3)Section 14ASection 36(1)(iii)Section 80Section 80I

…that that a forward contract of sale can be treated as a hedge transaction if such a contract is supported by a pre existing contract. 9.6 The AO has placed reliance on the decisions of Pandian Chemicals Vs. CIT (262 ITR 278)(SC) and CIT Vs. Sterling Foods (237 ITR 579) (SC) and holding that the hedging profit cannot be said to be forming a part of the profits of business of the industrial undertaking. In this regard, the decision of Hon’ble Delhi High Court in the case of Eltek SGS (P) Ltd (300 ITR 6), in case of CIT V. Dharam Pal Prem Chand (2008-TIOL-664-HC-Del-IT) are relevant, which had considered the Hon’…

ACIT Cen Cir-8, Mumbai vs. M/S. Jindal Drugs Ltd, Mumbai

In the result, appeals filed by the assessee are allowed in part whereas the appeals filed by the Revenue are dismissed

ITA 4342/MUM/2008[2005-2006]Status: DisposedITAT Mumbai29 Oct 2015AY 2005-2006

Bench: Shri R.C. Sharma & Shri Sandeep Gosainassessment Year: - 2005-06 Jindal Drugs Limited Vs. The Asst. Commissioner Of Bakhtawar, 6Th Floor, B&C, Income Tax, Central Circel 229, Nariman Point, – 8 Aaykar Bhavan, Mumbai – 400 021. M.K. Road, Mumbai – 400 020. Appellant Respondent Pan/Gir No. Aaacj1000A Assessment Year: - 2005-06 The Asst. Commissioner Of Vs.` Jindal Drugs Limited Bakhtawar, 6Th Floor, B&C, Income Tax, Central Circel – 8 229, Nariman Point, Old Cgo Bldg, Annexe, Mumbai – 400 021. M.K. Road, Mumbai – 400 020. Pan/Gir No. Aaacj1000A Appellant Respondent Assessment Year: - 2006-07 Jindal Drugs Limited Vs. The Asst. Commissioner Of Bakhtawar, 6Th Floor, Income Tax, Central Circel – 8, B&C, Aaykar Bhavan, 229, Nariman Point, M.K. Road, Mumbai – 400 020. Mumbai – 400 021. Pan/Gir No. Aaacj1000A Appellant Respondent

Section 143(3)Section 14ASection 36(1)(iii)Section 80Section 80I

…that that a forward contract of sale can be treated as a hedge transaction if such a contract is supported by a pre existing contract. 9.6 The AO has placed reliance on the decisions of Pandian Chemicals Vs. CIT (262 ITR 278)(SC) and CIT Vs. Sterling Foods (237 ITR 579) (SC) and holding that the hedging profit cannot be said to be forming a part of the profits of business of the industrial undertaking. In this regard, the decision of Hon’ble Delhi High Court in the case of Eltek SGS (P) Ltd (300 ITR 6), in case of CIT V. Dharam Pal Prem Chand (2008-TIOL-664-HC-Del-IT) are relevant, which had considered the Hon’…

Jindal Drugs Ltd, Mumbai vs. M/S. ACIT Cen Cir-8, Mumbai

In the result, appeals filed by the assessee are allowed in part whereas the appeals filed by the Revenue are dismissed

ITA 2592/MUM/2008[2005-2006]Status: DisposedITAT Mumbai29 Oct 2015AY 2005-2006

Bench: Shri R.C. Sharma & Shri Sandeep Gosainassessment Year: - 2005-06 Jindal Drugs Limited Vs. The Asst. Commissioner Of Bakhtawar, 6Th Floor, B&C, Income Tax, Central Circel 229, Nariman Point, – 8 Aaykar Bhavan, Mumbai – 400 021. M.K. Road, Mumbai – 400 020. Appellant Respondent Pan/Gir No. Aaacj1000A Assessment Year: - 2005-06 The Asst. Commissioner Of Vs.` Jindal Drugs Limited Bakhtawar, 6Th Floor, B&C, Income Tax, Central Circel – 8 229, Nariman Point, Old Cgo Bldg, Annexe, Mumbai – 400 021. M.K. Road, Mumbai – 400 020. Pan/Gir No. Aaacj1000A Appellant Respondent Assessment Year: - 2006-07 Jindal Drugs Limited Vs. The Asst. Commissioner Of Bakhtawar, 6Th Floor, Income Tax, Central Circel – 8, B&C, Aaykar Bhavan, 229, Nariman Point, M.K. Road, Mumbai – 400 020. Mumbai – 400 021. Pan/Gir No. Aaacj1000A Appellant Respondent

Section 143(3)Section 14ASection 36(1)(iii)Section 80Section 80I

…that that a forward contract of sale can be treated as a hedge transaction if such a contract is supported by a pre existing contract. 9.6 The AO has placed reliance on the decisions of Pandian Chemicals Vs. CIT (262 ITR 278)(SC) and CIT Vs. Sterling Foods (237 ITR 579) (SC) and holding that the hedging profit cannot be said to be forming a part of the profits of business of the industrial undertaking. In this regard, the decision of Hon’ble Delhi High Court in the case of Eltek SGS (P) Ltd (300 ITR 6), in case of CIT V. Dharam Pal Prem Chand (2008-TIOL-664-HC-Del-IT) are relevant, which had considered the Hon’…

ITO, New Delhi vs. M/S Neetee Clothing (P) Ltd., New Delhi

In the result, the appeal of the revenue is dismissed

ITA 267/DEL/2013[2002-03]Status: DisposedITAT Delhi21 Oct 2015AY 2002-03

Bench: Shri A.T. Varkey & Shri O.P. Kant

For Appellant: Dr. Rakesh Gupta, Advocate and Shri Somil Aggarwal, CAFor Respondent: Shri P. Dam Kanunjna, Senior DR
Section 143(1)Section 143(3)Section 147Section 148Section 149Section 149(1)Section 150Section 80Section 80HSection 80I

…me of 4 ITA No267/Del./2013 Rs.1,47,16,979/- had been reached after including receipts on account of Duty Draw back (DDB) of as much as Rs.3,21,28,469/-. He observed that as per the decision of the Hon'ble Supreme Court in the case of CIT Vs. Sterling Foods 237 ITR 579 and several other cases, any receipt/income on account of DDB or other export incentives is not to be treated as income derived from the business of industrial undertaking and thus, not eligible for deduction u/s 80IA/IB. He further observed that in a number of cases, Hon'ble Supreme Court had held that income on account of DDB and other expo…

M/S Thomson Press (India) Ltd vs. Commissioner of Income Tax- II

ITA - 124 / 2003HC Delhi09 Oct 2015
For Appellant: Mr SalilAggarwal, Mr Ravi Pratap Mall andFor Respondent: Mr Rohit Madan, Senior Standing counsel with
Section 10ASection 260ASection 263Section 80H

…he Greek word "demos", the people, and most dictionaries will so state. That is the ordinary meaning of the words "'derived from" and there is no reason to depart from that ordinary meaning here." 30. The Supreme Court in CIT vs. Sterling Foods: (1999) 237 ITR 57 (SC) considered the question, “whether income derived by an Assessee from the sale of import entitlements was profits and gains derived from an industrial undertaking”, in the context of Section 80HH of the Act and held as under: 2015:DHC:8531-DB ITA Nos. 83/2003 & 124/2003 Page 19 of 32 "We do not think that the source of the impo…

M/S Thomson Press (India) Ltd vs. Commissioner of Income Tax -II

ITA - 83 / 2003HC Delhi09 Oct 2015
For Appellant: Mr SalilAggarwal, Mr Ravi Pratap Mall andFor Respondent: Mr Rohit Madan, Senior Standing counsel with
Section 10ASection 260ASection 263Section 80H

…he Greek word "demos", the people, and most dictionaries will so state. That is the ordinary meaning of the words "'derived from" and there is no reason to depart from that ordinary meaning here." 30. The Supreme Court in CIT vs. Sterling Foods: (1999) 237 ITR 57 (SC) considered the question, “whether income derived by an Assessee from the sale of import entitlements was profits and gains derived from an industrial undertaking”, in the context of Section 80HH of the Act and held as under: 2015:DHC:8533-DB ITA Nos. 83/2003 & 124/2003 Page 19 of 32 "We do not think that the source of the impo…

Thomson Press (India) Ltd vs. Commissioner of Income Tax-II

ITA/83/2003HC Delhi09 Oct 2015
For Appellant: Mr SalilAggarwal, Mr Ravi Pratap Mall andFor Respondent: Mr Rohit Madan, Senior Standing counsel with
Section 10ASection 260ASection 263Section 80H

…he Greek word "demos", the people, and most dictionaries will so state. That is the ordinary meaning of the words "'derived from" and there is no reason to depart from that ordinary meaning here." 30. The Supreme Court in CIT vs. Sterling Foods: (1999) 237 ITR 57 (SC) considered the question, “whether income derived by an Assessee from the sale of import entitlements was profits and gains derived from an industrial undertaking”, in the context of Section 80HH of the Act and held as under: 2015:DHC:8533-DB ITA Nos. 83/2003 & 124/2003 Page 19 of 32 "We do not think that the source of the impo…

Thomson Press (India) Ltd vs. Commissioner of Income Tax-II

ITA/124/2003HC Delhi09 Oct 2015
For Appellant: Mr SalilAggarwal, Mr Ravi Pratap Mall andFor Respondent: Mr Rohit Madan, Senior Standing counsel with
Section 10ASection 260ASection 263Section 80H

…he Greek word "demos", the people, and most dictionaries will so state. That is the ordinary meaning of the words "'derived from" and there is no reason to depart from that ordinary meaning here." 30. The Supreme Court in CIT vs. Sterling Foods: (1999) 237 ITR 57 (SC) considered the question, “whether income derived by an Assessee from the sale of import entitlements was profits and gains derived from an industrial undertaking”, in the context of Section 80HH of the Act and held as under: 2015:DHC:8531-DB ITA Nos. 83/2003 & 124/2003 Page 19 of 32 "We do not think that the source of the impo…

Thomson Press (India) Ltd vs. Commissioner of Income Tax-II

ITA-124/2003HC Delhi09 Oct 2015
For Appellant: Mr SalilAggarwal, Mr Ravi Pratap Mall andFor Respondent: Mr Rohit Madan, Senior Standing counsel with
Section 10ASection 260ASection 263Section 80H

…he Greek word "demos", the people, and most dictionaries will so state. That is the ordinary meaning of the words "'derived from" and there is no reason to depart from that ordinary meaning here." 30. The Supreme Court in CIT vs. Sterling Foods: (1999) 237 ITR 57 (SC) considered the question, “whether income derived by an Assessee from the sale of import entitlements was profits and gains derived from an industrial undertaking”, in the context of Section 80HH of the Act and held as under: 2015:DHC:8531-DB ITA Nos. 83/2003 & 124/2003 Page 19 of 32 "We do not think that the source of the impo…

Thomson Press (India) Ltd vs. Commissioner of Income Tax-II

ITA-83/2003HC Delhi09 Oct 2015
For Appellant: Mr SalilAggarwal, Mr Ravi Pratap Mall andFor Respondent: Mr Rohit Madan, Senior Standing counsel with
Section 10ASection 260ASection 263Section 80H

…he Greek word "demos", the people, and most dictionaries will so state. That is the ordinary meaning of the words "'derived from" and there is no reason to depart from that ordinary meaning here." 30. The Supreme Court in CIT vs. Sterling Foods: (1999) 237 ITR 57 (SC) considered the question, “whether income derived by an Assessee from the sale of import entitlements was profits and gains derived from an industrial undertaking”, in the context of Section 80HH of the Act and held as under: 2015:DHC:8533-DB ITA Nos. 83/2003 & 124/2003 Page 19 of 32 "We do not think that the source of the impo…

The Commissioner of Income Tax vs. M/S Wipro Ltd

The appeals stand disposed of, accordingly

ITA/211/2009HC Karnataka25 Mar 2015

Bench: N.KUMAR,B.SREENIVASE GOWDA

Section 260

…87 - scrap export incentive, rent received, interest income and gain on exchange rate fluctuation should be treated as profits and gains derived from export and exempted u/s.10A of the Act contrary to the judgment of the Apex Court in Sterling Sea Foods 237 ITR 579?” [Question of law No.21 in ITA Nos.907 & 909/2008; Question of law No.17 in ITA Nos.904 & 905/2008; Question of law Nos.4, 5, 6, 7 in ITA Nos.210 & 211/2009 – (Department’s Appeal)]. 166. This Court had an occasion to consider the substantial question of law in assessee’s case itself in ITA 507/2002 decided on 25.8.2010 while dealin…

M/S Wipro Limited vs. The Deputy Commissioner of Income Tax

The appeals stand disposed of, accordingly

ITA/881/2008HC Karnataka25 Mar 2015

Bench: N.KUMAR,B.SREENIVASE GOWDA

Section 260

…87 - scrap export incentive, rent received, interest income and gain on exchange rate fluctuation should be treated as profits and gains derived from export and exempted u/s.10A of the Act contrary to the judgment of the Apex Court in Sterling Sea Foods 237 ITR 579?” [Question of law No.21 in ITA Nos.907 & 909/2008; Question of law No.17 in ITA Nos.904 & 905/2008; Question of law Nos.4, 5, 6, 7 in ITA Nos.210 & 211/2009 – (Department’s Appeal)]. 166. This Court had an occasion to consider the substantial question of law in assessee’s case itself in ITA 507/2002 decided on 25.8.2010 while dealin…

The Commissioner of Income Tax vs. M/S Motorola India Electronics (P) Ltd

ITA/428/2007HC Karnataka11 Dec 2013

Bench: N.KUMAR,RATHNAKALA

Section 10ASection 260Section 4

…e first degree.” That is the distinction between the words “derived from industrial undertaking” as against “profits attributable to industrial undertaking.” The Apex Court n the case of COMMISSIONER OF INCOME TAX VS. STERLING FOODS REPORTED IN (1999) 237 ITR 579 (SC), while dealing with Section 80HH has held as under: - 13 - “There must be, for the application of the words “derived from”, a direct nexus between the profits and gains and the industrial undertaking.” In the case of COMMISSIONER OF INCOME TAX VS. MENON IMPEX (P) LTD. REPORTED IN (2003) 259 ITR 403 (MAD), dealing with ex…

The Commissioner of Income Tax vs. M/S Novell Software Development (I) Pvt Ltd

In the result, this appeal is allowed in part and

ITA/251/2007HC Karnataka10 Jun 2013

Bench: D.V.SHYLENDRA KUMAR,B.S.INDRAKALA

Section 260Section 260ASection 80ASection 80H

…come in for interpretation and noticed by the Supreme Court in the case of LIBERTY INDIA LIMITED vs COMMISSIONER OF INCOME TAX reported in 317 ITR 218 and following its earlier view taken in COMMISSIONER OF INCOME TAX vs STERLING FOODS reported in 237 ITR 579 and having held that the profit should be directly attributable to the export activity and in the instant case it having been attributed directly to the fluctuation in the exchange rate, the assessee could not have got the benefit and the tribunal is in error in answering this issue against the revenue and in favour of the assessee. 12.…

The Commissioner of Income Tax vs. M/S Garniwal Exports (P) Ltd

Appeal is allowed

ITA/100/2007HC Karnataka06 Jun 2013

Bench: D.V.SHYLENDRA KUMAR,B.S.INDRAKALA

Section 260Section 80H

…4 within the country; that Section 80HHC benefit being available only to profits derived from an export activity and earning profits from it and following the ruling of the Supreme Court in the case of COMMISSIONER OF INCOME TAX vs STERLING FOODS (237 ITR 579(SC)) wherein the Supreme Court had examined the expression “derived from” and held in this case that there was no direct nexus between the activity of the export and the profits and amount received was not as a result of direct export but may be incidental to the export effected by the assessee in the earlier years, but that does not qualif…

Commissioner of Income Tax vs. Orient Crafts Ltd

ITA/955/2009HC Delhi01 Jun 2012

Bench: HON'BLE MR. JUSTICE SANJIV KHANNA,HON'BLE MR. JUSTICE R.V.EASWAR

Section 260ASection 28Section 5Section 80H

…ghts for the assessment years 2000-01 and 2001-02 as covered by Section 28(iiia) to (iiic) and had computed the deduction. The Commissioner of Income Tax referred to the decision of the Supreme Court in Commissioner of Income-tax Vs. Sterling Foods (1999) 237 ITR 579 and held that under the proviso to Section 80HHC(3), the three categories mentioned in Section 28(iiia), (iiib) and (iiic) have to be included. He held that deduction under ITA No. 591/2008 and connected matters 26 Section 80HHC has to be computed by reducing business profit by 90% from the receipts on sale of quota rights. He also obser…

The Commissioner of Income Tax vs. Orient Craft Ltd

ITA - 1010 / 2008HC Delhi01 Jun 2012
Section 260ASection 28Section 5Section 80H

…ghts for the assessment years 2000-01 and 2001-02 as covered by Section 28(iiia) to (iiic) and had computed the deduction. The Commissioner of Income Tax referred to the decision of the Supreme Court in Commissioner of Income-tax Vs. Sterling Foods (1999) 237 ITR 579 and held that under the proviso to Section 80HHC(3), the three categories mentioned in Section 28(iiia), (iiib) and (iiic) have to be included. He held that deduction under 2012:DHC:3792-DB ITA No. 591/2008 and connected matters 26 Section 80HHC has to be computed by reducing business profit by 90% from the receipts on sale of quota right…

The Commissioner of Income Tax vs. Orient Carft Ltd

ITA - 996 / 2008HC Delhi01 Jun 2012
Section 260ASection 28Section 5Section 80H

…ghts for the assessment years 2000-01 and 2001-02 as covered by Section 28(iiia) to (iiic) and had computed the deduction. The Commissioner of Income Tax referred to the decision of the Supreme Court in Commissioner of Income-tax Vs. Sterling Foods (1999) 237 ITR 579 and held that under the proviso to Section 80HHC(3), the three categories mentioned in Section 28(iiia), (iiib) and (iiic) have to be included. He held that deduction under 2012:DHC:3792-DB ITA No. 591/2008 and connected matters 26 Section 80HHC has to be computed by reducing business profit by 90% from the receipts on sale of quota right…

The Commissioner of Income Tax vs. Orient Craft Ltd

ITA - 994 / 2008HC Delhi01 Jun 2012
Section 260ASection 28Section 5Section 80H

…ghts for the assessment years 2000-01 and 2001-02 as covered by Section 28(iiia) to (iiic) and had computed the deduction. The Commissioner of Income Tax referred to the decision of the Supreme Court in Commissioner of Income-tax Vs. Sterling Foods (1999) 237 ITR 579 and held that under the proviso to Section 80HHC(3), the three categories mentioned in Section 28(iiia), (iiib) and (iiic) have to be included. He held that deduction under 2012:DHC:3792-DB ITA No. 591/2008 and connected matters 26 Section 80HHC has to be computed by reducing business profit by 90% from the receipts on sale of quota right…

The Commissioner of Income Tax vs. Orient Craft Ltd

ITA - 993 / 2008HC Delhi01 Jun 2012
Section 260ASection 28Section 5Section 80H

…ghts for the assessment years 2000-01 and 2001-02 as covered by Section 28(iiia) to (iiic) and had computed the deduction. The Commissioner of Income Tax referred to the decision of the Supreme Court in Commissioner of Income-tax Vs. Sterling Foods (1999) 237 ITR 579 and held that under the proviso to Section 80HHC(3), the three categories mentioned in Section 28(iiia), (iiib) and (iiic) have to be included. He held that deduction under 2012:DHC:3792-DB ITA No. 591/2008 and connected matters 26 Section 80HHC has to be computed by reducing business profit by 90% from the receipts on sale of quota right…