Cloth Traders (P) Ltd. v. CIT

3 SCC 538Reported decision1986#6966 most cited

What is Cloth Traders (P) Ltd. v. CIT authority for?

For the purpose of Section 80-M, deductions are to be allowed on gross total income and not on net income. This interpretation was later overruled by the Supreme Court.

16

judgments rely on this decision, according to BharatTax’s citation analysis of 366,314 Indian tax judgments — from 2013 to 2025.

Also referred to as

Cloth Traders (P) Ltd. v. CIT · Section 80-M · gross total income · net income · deduction on gross income · 1986 SCC 538

Sections most often in play

Section 143(3)Section 10(34)Section 139(5)Section 143(2)Section 148Section 14ASection 194QSection 69C

Issues it is cited on

section 80abretention moneysection 10(33)convertible foreign exchangesection 80csection 80ainitial assessment yearsection 253(3)eligible businesssection 80ia(4)section 80hsection 80hh

Judgments citing Cloth Traders (P) Ltd. v. CIT

Asstt. Commissioner of Income Tax, CC-1, Lucknow, Aayakar Bhawan, Ashok Marg vs. Apco Infratech Pvt. Ltd., Vibhuti Khand Gomti Nagar Lko

In the result, appeals vide

ITA 623/LKW/2024[2018-19]Status: DisposedITAT Lucknow02 Apr 2025AY 2018-19

Bench: Shri Anadee Nath Misshra & Shri Subhash Malguria

Section 143(1)Section 143(2)Section 143(3)Section 80I

…uld not be allowed. 9. The controversy in this case pertains to the deduction under Section 80-IA of the Act being allowed to the extent of ‘business income’ only. The claim of the Assessee that deduction under Section 80-IA should be allowed to the 5 (1986) 3 SCC 538 6 [2010] 328 ITR 448 (Bombay) extent of ‘gross total income’ was rejected by the Assessing Officer. It is relevant to reproduce Section 80AB of the Act which is as follows: “80AB. Deductions to be made with reference to the income included in the gross total income. — Where any deduction is required to be made or allowed under any section include…

M/S Apco Infratech Pvt. Ltd., Lucknow vs. D/ACIT-1, Central-1, Lucknow

In the result, appeals vide

ITA 17/LKW/2024[2018-19]Status: DisposedITAT Lucknow02 Apr 2025AY 2018-19

Bench: Shri Anadee Nath Misshra & Shri Subhash Malguria

Section 143(1)Section 143(2)Section 143(3)Section 80I

…uld not be allowed. 9. The controversy in this case pertains to the deduction under Section 80-IA of the Act being allowed to the extent of ‘business income’ only. The claim of the Assessee that deduction under Section 80-IA should be allowed to the 5 (1986) 3 SCC 538 6 [2010] 328 ITR 448 (Bombay) extent of ‘gross total income’ was rejected by the Assessing Officer. It is relevant to reproduce Section 80AB of the Act which is as follows: “80AB. Deductions to be made with reference to the income included in the gross total income. — Where any deduction is required to be made or allowed under any section include…

ACIT, Range-I, Lucknow vs. M/S Apco Infratech Pvt. Ltd., Lucknow

ITA 454/LKW/2020[2017-18]Status: DisposedITAT Lucknow02 Apr 2025AY 2017-18

Bench: Shri Anadee Nath Misshra & Shri Subhash Malguria

Section 143(1)Section 143(2)Section 143(3)Section 80I

…ould not be allowed. 9. The controversy in this case pertains to the deduction under Section 80-IA of the Act being allowed to the extent of 'business income' only. The claim of the Assessee that deduction under Section 80-IA should be allowed to the 5 (1986) 3 SCC 538 6 [2010] 328 ITR 448 (Bombay) extent of 'gross total income' was rejected by the Assessing Officer. It is relevant to reproduce Section 80AB of the Act which is as follows: "80AB. Deductions to be made with reference to the income included in the gross total income. Where any deduction is required to be made or allowed under any section included in…

M/S. Apco Infratech Pvt. Ltd., Lucknow vs. ACIT-I, Lucknow

In the result, appeals vide I

ITA 357/LKW/2020[2017-18]Status: DisposedITAT Lucknow02 Apr 2025AY 2017-18

Bench: Shri Anadee Nath Misshra & Shri Subhash Malguria

Section 143(1)Section 143(2)Section 143(3)Section 80I

…uld not be allowed. 9. The controversy in this case pertains to the deduction under Section 80-IA of the Act being allowed to the extent of 'business income' only. The claim of the Assessee that deduction under Section 80-IA should be allowed to the 5 (1986) 3 SCC 538 6 [2010] 328 ITR 448 (Bombay) extent of 'gross total income' was rejected by the Assessing Officer. It is relevant to reproduce Section 80AB of the Act which is as follows: "80AB. Deductions to be made with reference to the income included in the gross total income. Where any deduction is required to be made or allowed under any section included…

M/S. Apco Infratech Pvt. Ltd., Lucknow vs. ACIT-1, Lucknow

In the result, appeals vide

ITA 356/LKW/2020[2016-17]Status: DisposedITAT Lucknow02 Apr 2025AY 2016-17

Bench: Shri Anadee Nath Misshra & Shri Subhash Malguria

Section 143(1)Section 143(2)Section 143(3)Section 80I

…uld not be allowed. 9. The controversy in this case pertains to the deduction under Section 80-IA of the Act being allowed to the extent of ‘business income’ only. The claim of the Assessee that deduction under Section 80-IA should be allowed to the 5 (1986) 3 SCC 538 6 [2010] 328 ITR 448 (Bombay) extent of ‘gross total income’ was rejected by the Assessing Officer. It is relevant to reproduce Section 80AB of the Act which is as follows: “80AB. Deductions to be made with reference to the income included in the gross total income. — Where any deduction is required to be made or allowed under any section include…

Tata Elxsi Limited, Bangalore vs. Deputy Commisioner Incomer Tax, Circle-7(1)(1), Bangalore

Accordingly, the appeal filed by the assessee is partly allowed for statistical purposes

ITA 1152/BANG/2023[2018-19]Status: DisposedITAT Bangalore28 Feb 2024AY 2018-19

Bench: Shri Narender Kumar Choudhry & Shri Laxmi Prasad Sahuassessment Year : 2018-19 M/S. Tata Elxsi Ltd., The Deputy 126, Itpb Road, Commissioner Hoody, Of Income Tax, Whitefield, Circle – 7(1)(1), Bangalore – 560 048. Bangalore. Vs. Pan: Aaact7872Q Appellant Respondent

For Appellant: Shri Padam Chand Khincha, CAFor Respondent: Shri Subramanian .S, JCIT DR
Section 10ASection 10A(9)Section 250

…ction 80-M in 4. para 3 of the Judgment. It will be noticed that whereas Section 80-HH uses the expression "any profits and gains derived from", Section 80-M uses the expression "any income". Section 80-M was held, in the Cloth Traders (P) Ltd. Vs. CIT (1979) 3 SCC 538, to mean that for the purpose of that Section, deduction is to be allowed on the gross total income and not on net income. This was over-ruled in Distributors (Baroda) Pvt. Ltd. Vs. Union of India (1986) 1 SCC 43. Bhagwati, J. who was party to the earlier decision in the Cloth Traders' case 5. delivered a judgment in the Distributors( Baroda) case…

ACIT, New Delhi vs. M/S. Mmtc Ltd., New Delhi

In the result, the appeal of the assessee in ITA No

ITA 3290/DEL/2010[2003-04]Status: DisposedITAT Delhi30 Jan 2024AY 2003-04

Bench: Shri N.K. Billaiya & Ms Astha Chandra

For Appellant: Shri Rohit Jain, AdvFor Respondent: Shri Subhra Jyoti Chakraborty, CIR-DR
Section 2Section 80ASection 80B(5)Section 80CSection 80H

…pex Court has held; 9. The controversy in this case pertains to the deduction under Section 80- IA of the Act being allowed to the extent of ‘business income’ only. The claim of the Assessee that deduction under Section 80-IA should be allowed to the 5 (1986) 3 SCC 538 6 [2010] 328 ITR 448 (Bombay) 9 | Page extent of ‘gross total income’ was rejected by the Assessing Officer. It is relevant to reproduce Section 80AB of the Act which is as follows: “80AB. Deductions to be made with reference to the income included in the gross total income. — Where any deduction is required to be made or allowed under any section…

Mmtc Limited, New Delhi vs. DCIT, New Delhi

In the result, the appeal of the assessee in ITA No

ITA 2488/DEL/2010[2003-04]Status: DisposedITAT Delhi30 Jan 2024AY 2003-04

Bench: Shri N.K. Billaiya & Ms Astha Chandra

For Appellant: Shri Rohit Jain, AdvFor Respondent: Shri Subhra Jyoti Chakraborty, CIR-DR
Section 2Section 80ASection 80B(5)Section 80CSection 80H

…pex Court has held; 9. The controversy in this case pertains to the deduction under Section 80- IA of the Act being allowed to the extent of ‘business income’ only. The claim of the Assessee that deduction under Section 80-IA should be allowed to the 5 (1986) 3 SCC 538 6 [2010] 328 ITR 448 (Bombay) 9 | Page extent of ‘gross total income’ was rejected by the Assessing Officer. It is relevant to reproduce Section 80AB of the Act which is as follows: “80AB. Deductions to be made with reference to the income included in the gross total income. — Where any deduction is required to be made or allowed under any section…

M/S. Tata Elxsi Limited., Bangalore vs. Deputy Commissioner Income Tax, Circle-7(1)(1), Bangalore

In the result, all the appeals of the assessee are partly allowed for statistical purposes

ITA 927/BANG/2023[2016-17]Status: DisposedITAT Bangalore08 Jan 2024AY 2016-17

Bench: Shri George George K. & Shri Chandra Poojari

For Appellant: Shri Padam Chand Kincha, A.RFor Respondent: Shri D.K. Mishra, D.R
Section 10ASection 30Section 80ASection 80H

…ITA Nos.927, 974 & 975/Bang/2023 Tata Elxsi Ltd., Bangalore IN THE INCOME TAX APPELLATE TRIBUNAL “A’’ BENCH: BANGALORE BEFORE SHRI GEORGE GEORGE K., VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ITA No.927, 974 & 975/Bang/2023 Assessment Years: 2016-17, 2017-18 & 2020-21 M/s. Tata Elxsi Ltd. 126, ITBP Road DCIT Hoody, Whitefield Circle-7(1)(1) Vs. Bangalore 560 048 Bangalore PAN NO : AACCV3079R APPELLANT RESPONDENT Assessee by : Shri Padam Chand Kincha, A.R. Revenue by : Shri D.K. Mishra, D.R. Date of Hearing : 08.01.2024 Date of Pronouncement : 08.01.2024 O R D E R PER BENCH: These appe…

Mmtc Ltd vs. DCIT, Circle-5(1)

The appeal is allowed, with aforesaid consequences, as directed in ground wise findings

ITA 1722/DEL/2006[2003-2004]Status: DisposedITAT Delhi30 Jun 2023AY 2003-2004

Bench: Sh. G.S.Pannu, Hon’Ble & Sh. Anubhav Sharmam/S. Mmtc Ltd., Scope Vs. Dcit, Complex, Circle-5(1) Core 1,7, Institutional Area, New Delhi Lodhi Road, New Delhi- 110003 Pan : (Appellant) (Respondent)

Section 143(3)Section 44ASection 80Section 80H

…apex Court has held; 9. The controversy in this case pertains to the deduction under Section 80-IA of the Act being allowed to the extent of ‘business income’ only. The claim of the Assessee that deduction under Section 80-IA should be allowed to the 5 (1986) 3 SCC 538 6 [2010] 328 ITR 448 (Bombay) 9 | Page extent of ‘gross total M/s. MMTC Ltd. 21 income’ was rejected by the Assessing Officer. It is relevant to reproduce Section 80AB of the Act which is as follows: “80AB. Deductions to be made with reference to the income included in the gross total income. — Where any deduction is required to be made or allowe…

DCIT-2(3), Mumbai vs. M/S. Zensar Technologies Ltd., Mumbai

In the result, the appeal is partly allowed

ITA 5653/MUM/2009[2004-05]Status: DisposedITAT Mumbai19 Apr 2023AY 2004-05

Bench: Amit Shukla () & Ms. Padmavathy S. ()

Section 10ASection 80Section 92

…1 ITA 5653/Mum/2009 M/s Zensar Technologies Ltd IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “J”, MUMBAI BEFORE AMIT SHUKLA (JUDICIAL MEMBER) AND MS. PADMAVATHY S. (ACCOUNTANT MEMBER) I.T.A. No.5653/Mum/2009 (Assessment year 2004-05) DCIT-2(3), Mumbai vs M/s Zensar Technologies Ltd Magnet House, 2nd Floor Room No.555, Aayakar Bhavan M.K. Road, Mumbai-400 020 N.M. Marg, Ballard Estate Mumbai-400 001 PAN : AAACF0742K APPELLANT RESPONDENT Assessee represented by Shri Nitesh Joshi Department represented by Shri Manoj Kumar – CIT DR Date of hearing 12-04-2023 Date of pronouncement 19-04-2023 O R D E R PER :…

Dy. Commissioner of Income Tax, Circle-16(1), Hyderabad vs. Nsl Renewable Power Private Limited, Hyderabad

In the result, the appeals of the revenue are partly allowed for statistical purposes in above terms

ITA 166/HYD/2020[2016-17]Status: DisposedITAT Hyderabad03 Sept 2021AY 2016-17

Bench: Shri Satbeer Singh Godara & Shri Laxmi Prasad Sahu

For Appellant: Shri Aliasgar RampurwalaFor Respondent: Shri P. Chandra Sekhar
Section 115JSection 143(3)Section 14ASection 80I

…is limited to determining the quantum of deductible income included in the gross total income. Following a decision of the Income Tax Appellate Tribunal, Mumbai dated 25.04.2003 in Royal Cushion Vinyl Products Ltd. v. Dy. Commissioner of Income Tax, 1 (1979) 3 SCC 538 Mumbai (ITA No. 770/MUM/98), the Appellate Authority set aside the order of the Assessing Officer on this count. The Appellate Authority directed the Assessing Officer not to restrict the deduction admissible under Section 80-IA of the Act to income under the head ‘business’. The Assessing Officer was further directed to aggregate the deduction und…

Dy. Commissioner of Income Tax, Circle-16(1), Hyderabad vs. Nsl Renewable Power Private Limited, Hyderabad

In the result, the appeals of the revenue are partly allowed for statistical purposes in above terms

ITA 165/HYD/2020[2014-15]Status: DisposedITAT Hyderabad03 Sept 2021AY 2014-15

Bench: Shri Satbeer Singh Godara & Shri Laxmi Prasad Sahu

For Appellant: Shri Aliasgar RampurwalaFor Respondent: Shri P. Chandra Sekhar
Section 115JSection 143(3)Section 14ASection 80I

…is limited to determining the quantum of deductible income included in the gross total income. Following a decision of the Income Tax Appellate Tribunal, Mumbai dated 25.04.2003 in Royal Cushion Vinyl Products Ltd. v. Dy. Commissioner of Income Tax, 1 (1979) 3 SCC 538 Mumbai (ITA No. 770/MUM/98), the Appellate Authority set aside the order of the Assessing Officer on this count. The Appellate Authority directed the Assessing Officer not to restrict the deduction admissible under Section 80-IA of the Act to income under the head ‘business’. The Assessing Officer was further directed to aggregate the deduction und…

Commissioner of Income Tax-I vs. M/S Reliance Energy Ltd (Formerly Bses Ltd.) Through Its M.D

The Appeal is dismissed qua the issue of the extent of deduction under

C.A. No.-001327-001327 - 2021Supreme Court28 Apr 2021

Bench: HON'BLE MR. JUSTICE L. NAGESWARA RAO

Section 80Section 80A

…mining the quantum of deductible income included in the gross total income. Following a decision of the Income Tax Appellate Tribunal, Mumbai dated 25.04.2003 in Royal Cushion Vinyl Products Ltd. v. Dy. Commissioner of Income Tax, 1 (1979) 3 SCC 538 6 | P a g e Mumbai (ITA No. 770/MUM/98), the Appellate Authority set aside the order of the Assessing Officer on this count. The Appellate Authority directed the Assessing Officer not to restrict the deduction admissible under Section 80-IA of the Act to income under the head ‘business’. The Assessing Officer was further direct…

M/S. Vijay Industries vs. Commissioner of Income Tax

Appeals are allowed

C.A. No.-001581-001582 - 2005Supreme Court01 Mar 2019

Bench: HON'BLE MR. JUSTICE A.K. SIKRI

Section 80H

…with reference to Income included in the Gross Total Income under the heading ‘C – Deduction in respect of certain incomes’. It also makes it clear that the amount of income of that nature is to be computed in accordance with the 2 (1978) 2 SCC 644 3 (1979) 3 SCC 538 Civil Appeal Nos. 1581-1582 of 2005 a/w. Connected matters Page 10 of 22 provisions of the Act (before making any deduction under this Chapter). That alone shall be deemed to be the amount of income of that nature which is derived or received by the assessee and which is included in his Gross Total Income. 14) Her submission is that…

Commissioner of Income Tax-I vs. M/s.Isnar Estates [P] Ltd

ITTA/431/2012HC Telangana16 Jul 2013

Bench: The Tribunal Pleading That On 24.06.2009, While, Smt. Satya Devi, Mother Of The Claimants Was Travelling In A Bus Bearing Registration No. Jk02E-7525 From Katra To Udhampur For Attending Her Duties, The Said Bus Suffered An Accident On Sr. No. 89

…HIGH COURT OF JAMMU & KASHMIR AND LADAKH AT JAMMU MA No 431/2012 c/w MA No. 422/2012 Reserved on:- 17.09.2025. Pronounced on:- 25.09.2025 National Insurance Co. Ltd. …..Appellants Through: Mr. C.S Gupta, Advocate Vs Pooja Devi and ors. .…. Respondents Through: Mr. S. A Hussain, Advocate CORAM: HON’BLE MR.JUSTICE SANJAY DHAR, JUDGE JUDGMENT 1. By this common judgment, two appeals, one filed by the insurer for setting aside award dated 29.05.2012 passed by Motor Accident Claims Tribunal, Reasi (hereinafter referred to as “the Tribunal”) and oth…