M/s Liberty India Vs. CIT 225 CTR 233(SC), CIT v. Sterling Foods

227 ITR 557Supreme Court of India1997#3661 most cited

What is M/s Liberty India Vs. CIT 225 CTR 233(SC), CIT v. Sterling Foods authority for?

Income from a deferred VAT rebate granted by a state government for sales tax incentives is not considered income derived from an industrial undertaking and is therefore not eligible for deduction under Section 80IC.

32

judgments rely on this decision, according to BharatTax’s citation analysis of 367,368 Indian tax judgments — from 2007 to 2026.

Also referred to as

Liberty India vs. CIT · CIT vs. Sterling Foods · Section 80IC · eligible business · industrial undertaking · VAT rebate · sales tax incentive · Himachal Pradesh General Sales Tax Act · income derived from business · deduction eligibility

Sections most often in play

Section 143(3)Section 246ASection 250Section 253Section 36(1)(iii)Section 43BSection 73Section 80IA(4)

Issues it is cited on

deduction under section 80iasection 80ia(4)eligible businesssection 80icsection 80iasection 80ibsection 80igross total incomecross objectionsection 80income from other sourcesassistant commissioner

Judgments citing M/s Liberty India Vs. CIT 225 CTR 233(SC), CIT v. Sterling Foods

H.M. Steels Ltd., Sangrur vs. ACIT, Sangrur

In the result, this appeal of the Revenue is partly allowed

ITA 589/CHANDI/2014[2009-10]Status: DisposedITAT Chandigarh05 Nov 2018AY 2009-10

Bench: Shri Sanjay Garg & Dr. B.R.R. Kumarआयकर अपील सं Ita No. 366/Chd/2013 "नधा"रण वष" / Assessment Year : 2008-09

For Appellant: Sh. N.K.Garg, AdvocateFor Respondent: Smt. Chanderkanta, Sr.DR
Section 234BSection 80Section 80ISection 8O

…deduction u/s 80IC. The ITAT was also not right in law in not appreciating the ratio of Hon'ble Supreme Court in the cases of M/s Liberty India Vs. CIT 225 CTR 233(SC), CIT vs. Sterling Foods 153 CTR 439, 237 ITR 589, Vellore Electric Corporation Ltd. Vs. CIT 227 ITR 557 (SC). 4. In the facts and circumstances of the case, Ld. CIT(A) has erred in holding that the income from Deferred VAT Rebate received by the assessee is allowed to be included as profits derived from industrial undertaking and eligible for deduction u/s 80IC of the Income Tax Act, 1961, when the assessee received it from the Himachal Govt. for t…

DCIT, Sangrur vs. M/S H.M. Steel Ltd., Sangrur

In the result, this appeal of the Revenue is partly allowed

ITA 584/CHANDI/2014[2010-11]Status: DisposedITAT Chandigarh05 Nov 2018AY 2010-11

Bench: Shri Sanjay Garg & Dr. B.R.R. Kumarआयकर अपील सं Ita No. 366/Chd/2013 "नधा"रण वष" / Assessment Year : 2008-09

For Appellant: Sh. N.K.Garg, AdvocateFor Respondent: Smt. Chanderkanta, Sr.DR
Section 234BSection 80Section 80ISection 8O

…deduction u/s 80IC. The ITAT was also not right in law in not appreciating the ratio of Hon'ble Supreme Court in the cases of M/s Liberty India Vs. CIT 225 CTR 233(SC), CIT vs. Sterling Foods 153 CTR 439, 237 ITR 589, Vellore Electric Corporation Ltd. Vs. CIT 227 ITR 557 (SC). 4. In the facts and circumstances of the case, Ld. CIT(A) has erred in holding that the income from Deferred VAT Rebate received by the assessee is allowed to be included as profits derived from industrial undertaking and eligible for deduction u/s 80IC of the Income Tax Act, 1961, when the assessee received it from the Himachal Govt. for t…

DCIT, Sangrur vs. M/S H.M. Steel Ltd., Sangrur

In the result, this appeal of the Revenue is partly allowed

ITA 583/CHANDI/2014[2009-10]Status: DisposedITAT Chandigarh05 Nov 2018AY 2009-10

Bench: Shri Sanjay Garg & Dr. B.R.R. Kumarआयकर अपील सं Ita No. 366/Chd/2013 "नधा"रण वष" / Assessment Year : 2008-09

For Appellant: Sh. N.K.Garg, AdvocateFor Respondent: Smt. Chanderkanta, Sr.DR
Section 234BSection 80Section 80ISection 8O

…deduction u/s 80IC. The ITAT was also not right in law in not appreciating the ratio of Hon'ble Supreme Court in the cases of M/s Liberty India Vs. CIT 225 CTR 233(SC), CIT vs. Sterling Foods 153 CTR 439, 237 ITR 589, Vellore Electric Corporation Ltd. Vs. CIT 227 ITR 557 (SC). 4. In the facts and circumstances of the case, Ld. CIT(A) has erred in holding that the income from Deferred VAT Rebate received by the assessee is allowed to be included as profits derived from industrial undertaking and eligible for deduction u/s 80IC of the Income Tax Act, 1961, when the assessee received it from the Himachal Govt. for t…

DCIT, Sangrur vs. M/S H.M. Steel Ltd., Sangrur

In the result, this appeal of the Revenue is partly allowed

ITA 585/CHANDI/2013[2008-09]Status: DisposedITAT Chandigarh05 Nov 2018AY 2008-09

Bench: Shri Sanjay Garg & Dr. B.R.R. Kumarआयकर अपील सं Ita No. 366/Chd/2013 "नधा"रण वष" / Assessment Year : 2008-09

For Appellant: Sh. N.K.Garg, AdvocateFor Respondent: Smt. Chanderkanta, Sr.DR
Section 234BSection 80Section 80ISection 8O

…deduction u/s 80IC. The ITAT was also not right in law in not appreciating the ratio of Hon'ble Supreme Court in the cases of M/s Liberty India Vs. CIT 225 CTR 233(SC), CIT vs. Sterling Foods 153 CTR 439, 237 ITR 589, Vellore Electric Corporation Ltd. Vs. CIT 227 ITR 557 (SC). 4. In the facts and circumstances of the case, Ld. CIT(A) has erred in holding that the income from Deferred VAT Rebate received by the assessee is allowed to be included as profits derived from industrial undertaking and eligible for deduction u/s 80IC of the Income Tax Act, 1961, when the assessee received it from the Himachal Govt. for t…

M/S H.M. Steel Ltd., Sangrur vs. Addl. CIT, Sangrur

In the result, this appeal of the Revenue is partly allowed

ITA 366/CHANDI/2013[2008-09]Status: DisposedITAT Chandigarh05 Nov 2018AY 2008-09

Bench: Shri Sanjay Garg & Dr. B.R.R. Kumarआयकर अपील सं Ita No. 366/Chd/2013 "नधा"रण वष" / Assessment Year : 2008-09

For Appellant: Sh. N.K.Garg, AdvocateFor Respondent: Smt. Chanderkanta, Sr.DR
Section 234BSection 80Section 80ISection 8O

…deduction u/s 80IC. The ITAT was also not right in law in not appreciating the ratio of Hon'ble Supreme Court in the cases of M/s Liberty India Vs. CIT 225 CTR 233(SC), CIT vs. Sterling Foods 153 CTR 439, 237 ITR 589, Vellore Electric Corporation Ltd. Vs. CIT 227 ITR 557 (SC). 4. In the facts and circumstances of the case, Ld. CIT(A) has erred in holding that the income from Deferred VAT Rebate received by the assessee is allowed to be included as profits derived from industrial undertaking and eligible for deduction u/s 80IC of the Income Tax Act, 1961, when the assessee received it from the Himachal Govt. for t…

ITO 19(3)(2), Mumbai vs. Indian Corporate Loan Securitization Trust 2008 Series 14I, Mumbai

In the result, Revenue’s appeal for A

ITA 4343/MUM/2013[2009-10]Status: DisposedITAT Mumbai17 Feb 2017AY 2009-10

Bench: Shri Jason P. Boaz & Shri Sandeep Goasinindian Corporate Loan Securitisation Income Tax Officer-9(3)(2) Trust- 2008 Series 14 Mumbai C/O. Il & Fs Trust Co. Ltd. Vs. 10Th Floor, “G” Block, Bkc Bandra (E), Mumbai 400051 Pan – Aaati6786P Appellant Respondent Income Tax Officer-(23)1)(2) Indian Corporate Loan [Erstwhile Ito-19(3)(2)] Securitisation Trust- 2008 Series 14 Room No. 108, Matru Mandir Vs. C/O. Il & Fs Trust Co. Ltd. Tardeo Road, Grant Road 10Th Floor, “G” Block, Bkc Mumbai 400007 Bandra (E), Mumbai 400051 Pan – Aaati6786P Appellant Respondent

For Appellant: Shri S.E. Dastur &For Respondent: Shri P.C. Chhotaray

…ee is in control of the money and merely because restriction was put on use of the money could not make any difference. Since this case is factually different from that of the case on hand, it is not applicable. (vii) Vellore Electric Corpn. Ltd. vs. CIT (SC) 227 ITR 557 Follows Associated Power Co. Ltd. (viii) Performing Right Society Ltd & Another vs. CIT (SC) 106 ITR 11 In this cited case the Hon'ble Apex Court held that this was a case of application of income and not diversion of income on the peculiar facts of the case and therefore the same would not be applicable to the case on hand. (ix) CIT vs. Madras R…

Nuclear Power Corporation of India Ltd, Mumbai vs. CIT Ltu, Mumbai

ITA 3880/MUM/2014[2009-10]Status: DisposedITAT Mumbai11 Jan 2017AY 2009-10
For Appellant: Shri Nitesh JoshiFor Respondent: Shri N.P. Singh-CIT-DR
Section 115Section 143Section 154Section 254(1)Section 263

…ributions to the various funds did not form part of the income of the assessee and therefore same should not be added back to the profit as per the profit and loss account to arrive at book profit. He relied upon the case of Vellore Electric Corporation Ltd. (227 ITR 557) and held that there was no were debatable issue in that regard, that the failure of the AO in adding back the interest income to decommissioning fund, levy for the year transferred from sale of decommissioning, interest income on renovation and modernisation fund and the interest income on research and development was erroneous and was prejudici…

ACIT 8(1), Mumbai vs. Bunge India P. Ltd, Mumbai

ITA 4336/MUM/2009[2005-06]Status: DisposedITAT Mumbai18 May 2016AY 2005-06
For Appellant: Shri Vispi PatelFor Respondent: Shri Debashish Chandra
Section 254(1)Section 92A

…e companies having trading activity.He relied upon the cases of Sony India(P) Ltd (315ITR150-AT),E-gain indications Private Ltd(118 ITD 243)Mentor Graphics (Noida)Private Ltd(109 ITD 101),Dharampal Premchand Ltd(317 ITR 353), Vellore Electric Corporation Ltd.(227 ITR 557), Lokay Holdings (308 ITR 356). 6.We find that with a view to benchmark the international transactions of the MTA,the assessee had carried out detailed comprehensive benchmarking analysis, that it had selected TNMM is the most appropriate method(MAM),that it carried out a search process on capitaline database for identifying the comparables,that…

The Karnataka State Co-Operative Apex Bank Ltd, Bangalore vs. Deputy Commissioner of Income Tax, Bangalore

In the result, grounds of appeal Nos

ITA 1372/BANG/2014[2007-08]Status: DisposedITAT Bangalore29 Feb 2016AY 2007-08

Bench: Shri Vijay Pal Rao & Shri Inturi Rama Raothe Karnataka State Co-Operative Apex Bank Ltd., ‘Uthunga’, No.1, Pmk Road, Chamarajpet, Bangalore-560018. … Appellant Pan:Aabat 0269 J Vs. Deputy Commissioner Of Income-Tax, Circle 3(1), Bangalore. … Respondent

For Appellant: Shri Bharath L, CAFor Respondent: Shri Sanjay Kumar, CIT(DR)
Section 143(1)Section 143(2)Section 143(3)Section 147Section 148Section 28

…aced by the ld.CIT(DR) on the decision of Page 12 of 13 the Hyderabad bench of Tribunal in the case of A.P.Mahesh Co- operative Urban Bank Ltd (supra) rests on the decision of the Hon’ble Supreme Court in the case of Vellore Electric Corporation Ltd. Vs. CIT (227 ITR 557). On perusal of the said decision, it is clear that the decision is relating to creation of reserve fund which always remained with the assessee-corporation. Therefore, the ratio of decision in teh case of A P Mahesh Co-operative Urban Bank Ltd (supra) is not applicable to the facts of the case. We, direct the AO to allow the amount spent on the…

Honda Siel Power Products Ltd vs. The Commissioner of Income Tax New Delhi

The appeal is dismissed with no orders as to costs

ITA - 995 / 2007HC Delhi25 Oct 2007
Section 260Section 80

…f the business of generation and distribution of electricity.” 9. In the context of Section 80-I, the Supreme Court underscored the above distinction in its decision in Vellore Electric Corporation Limited v. Commissioner of Income Tax [1977] 227 ITR 557 (SC). The decisions of the Supreme Court in Sterling Foods Limited and Pandian Chemicals Limited reiterate this distinction and insist that only such business profits that have a direct nexus to the essential business activity of the Assessee can qualify for deduction under Section 80-HH of the Act. Inasmuch as both Sections 80-HH and 80…

Honda Siel Power Products Ltd vs. Commissioner of Income Tax

The appeal is dismissed with no orders as to costs

ITA/995/2007HC Delhi25 Oct 2007
Section 260Section 80

…f the business of generation and distribution of electricity.” 9. In the context of Section 80-I, the Supreme Court underscored the above distinction in its decision in Vellore Electric Corporation Limited v. Commissioner of Income Tax [1977] 227 ITR 557 (SC). The decisions of the Supreme Court in Sterling Foods Limited and Pandian Chemicals Limited reiterate this distinction and insist that only such business profits that have a direct nexus to the essential business activity of the Assessee can qualify for deduction under Section 80-HH of the Act. Inasmuch as both Sections 80-HH and 80…

Commissioner of Income Tax-V N vs. Damanjit Singh

ITA/166/2000HC Delhi12 Jan 2007

…ould not qualify as business income. This decision was followed in CIT v. Cochin Refineries Ltd. (1985) 154 ITR 345 (Ker) in the context of Section 80I and subsequently by the Hon’ble Supreme Court itself in Vellore Electric Corporation Ltd. v. CIT (1997) 227 ITR 557 (SC). The latter decision was rendered in the context of Section 80I which uses the words “profits and means attributable to any priority industry.” The question that arose was whether the assessee was entitled to the relief under Section 80I even in respect of income earned by way of interest on the investment in securities of the amounts…