PLASTIBLENDS INDIA LIMITED versus ADDL. COMMISSIONER OF INCOME TAX, MUMBAI & ANR.

Citation: [2017] 10 S.C.R. 104 · Decided: 09-10-2017 · Supreme Court of India · Bench: A.K. SIKRI · Disposal: Dismissed

cites 3 · see the full citation network in Lexace

Judgment (excerpt)

A 
B 
c 
[2017] IO S.C.R. 104 
PLASTIBLENDS INDIA LIMITED 
v. 
ADDL. COMMISSIONER OF INCOME TAX, MUMBAI & ANR. 
(Civil Appeal No. 238 of2012) 
OCTOBER 9, 2017 
[A. K. SIKRI AND ASHOK BIIUSHAN, JJ.] 
Income Tax Act, 1961: s. 80-IA - Deductions in respect of 
profits 1111d gains from industrial undertakings -
Claim of 
depreciation u!s. 80-IA - Assessee, <111 industrial undertaking 
engaged in infrastructural development - Computation of assessee s 
income under head 'profits and gains' of business - Whether 
deduction to be reduced by allowance of depreciation for the year 
even though asses.see exercised option not to clai1,; depreciation 
u/s. 32 - Held: Depreciation had to be reduced for computing the 
D profits eligible for deduction 1t!s. 80-IA, as it was a complete code 
in itself - Any device adopted to reduce or inflate the profits of 
eligible business to be rejected. 
E 
F 
Dismissing the appeals, the Court 
HELD: 1.1 All the asscssces are those industrial 
undertakings which fulfil the conditions mentioned in Section 80-
IA of the Income Tax Act, 1961 and, therefore, are entitled to 
deductions as stipulated in sub-section (5) of the said Section. 
All the asscssces fall in that category of industrial undertakings 
which arc entitled to 100% deduction of the profits and gains 
derived from such industrial undertakings for the specified 
number of years. It is also an admitted fact that for the Assessment 
Years in question, they were entitled to the said deduction and 
their assessments were completed under Section 80-IA. [Para 
6] [111-F-G; 112-A] 
G 
1.2 The Full Bench of the Bombay High Court in 
H 
*Plastiblends India Limited answered the reference by holding 
that depreciation had to be reduced for computing the profits 
eligible for deduction under Section 80-IA, as it was a complete 
code in itself. For arriving at the said conclusion, the Full Bench 
took note of the relevant provisions of Chapter VI-A, particularly, 
104 
PLASTIBLENDS INDIA LIMITED v. ADDL. COMMISSIONER 
105 
OF INCOME TAX, MUMBAI & ANR. 
Section 80A, Section 80AB and Section SOB as well as Section A 
80-IA of the Act. Contrasting the provisions of Chapter VI-A with 
Chapter IV, the High Court remarked that whereas Chapter IV 
contains provision relating to the computation of total income 
under various heads of income as also the deductions that are 
allowable under each head, Chapter VI contains provisions B 
relating to the aggregation of income and set off or carry forward 
of loss. Chapter VI-A of the Act, on the other hand, provides for 
special deductions that are allowed at such rates that are specified 
in the respective provisions on the gross total income of the 
assessee. High Court noticed that Section 80-IA is a code by 
itself and deduction allowable under Section 80-IA is a speci;;l 
C 
deduction which is linked to profts, unlike deductions contained 
in Chapter IV of the Act which are linked to investment. [Paras 
12, 16] [115-B-D; 120-A] 
1.3 Marked distinction between the two Chapters-Chapter 
IV and Chapter VI-A, is that not only Section 80-IA is a code by 
D 
itself, it contains the provision for special deduction which is 
linked to profits. In contrast, Chapter IV of the Act, which allows 
depreciation under Section 32 of the Act is linked to investment. 
This Court has also made it clear that Section 80-IA of the Act 
not only contains substantive but procedural provisions for 
computation of special deduction. Thus, any diovice adopted to 
E 
reduce or inflate the profits of eligible business has to be rejected. 
The assessees/appellants want 100% deduction, without taking 
into consideration depreciation which. they want to utilise in the 
subsequent years. This would be anathema to the scheme under 
Section 80-IA of the Act which is linked to profits and if the 
F 
contention of the assessees is accepted, it would allow them to 
inflate the profits linked incentives provided under Section 80-
IA of the Act which cannot be permitted. [Para 18] [121-B-E] 
*Plastiblends India Limited v. Additional Commissioner 
of Income-Tax & Ors. (2009) 318 ITR 352 - approved. 
G 
CIT v. Mahendra Mills (2000) 243 ITR 56 - held 
inapplicable. 
Scoop Industries P. Ltd. v. Income-Tax Officer (2007) 
289 ITR 195; Grasim Industries Ltd. v. Assistant 
H 
106 
A 
B 
c 
D 
E 
F 
G 
H 
SUPREME COURT REPORTS 
[2017) I 0 S.C.R. 
Commissioner of Income-Tax & Ors. (2000) 245 TTR 
677; Liberty India v. Commissioner of Income Tax 
(2009)

Excerpt shown. Read the full judgment & AI analysis in Lexace.