SHITAL FIBERS LIMITED versus COMMISSIONER OF INCOME TAX

Citation: [2025] 5 S.C.R. 1248 · Decided: 20-05-2025 · Supreme Court of India · Bench: ABHAY S. OKA · Disposal: Reference answered
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Judgment (excerpt)

[2025] 5 S.C.R. 1248 : 2025 INSC 743
Shital Fibers Limited 
v. 
Commissioner of Income Tax
(Civil Appeal No. 14318 of 2015)
20 May 2025
[Abhay S. Oka,* Ahsanuddin Amanullah and Augustine 
George Masih, JJ.]
Issue for Consideration
Deductions claimed cumulatively under the provisions of s.80-HHC 
and s.80-IA or s.80-IB under Heading ‘C’ of Chapter VI-A, Income 
Tax Act, 1961, if can be allowed; scope of restriction u/sub-section (9) 
of s.80-IA, Income Tax Act, 1961 on such deductions claimed.
Headnotes†
Income Tax Act, 1961 – Chapter VI-A – Heading ‘C’– ss.80-HHC, 
80-IA, 80-IB, 80-IA(9) – Deductions u/ss.80-HHC, 80-IA and  
80-IB under Heading ‘C’ – Appellant claimed deductions  
u/s.80-HHC and ss.80-IA, 80-IB, disallowed – Appeal 
thereagainst dismissed till High Court which held that s.80-
IA(9) bars claim for deduction under any other provision of 
Chapter VI-A, if deduction u/s.80-IA has been allowed – Matter 
before Supreme Court, difference of opinion between two 
Judges – Matter referred to three judge bench:
Held: On a plain reading of s.80-IA(9), if a deduction of profits 
and gains u/s.80-IA is claimed and allowed, the deduction to the 
extent of such profits and gains in any other provision under the 
heading ‘C’ is not allowed – The deduction to the extent allowed 
u/s.80-IA cannot be allowed under any other provision under 
heading ‘C’ – s.80-IA(9), on its plain reading, does not provide that 
when a deduction is allowed u/s.80-IA, while considering the claim 
for deduction under any of the provision under heading ‘C’, the 
deduction allowed u/s. 80-IA should be deducted from the gross 
total income – The restriction under sub-section (9) of s. 80-IA is not 
on computing the total gross income – It restricts deduction under 
any other provision under heading ‘C’ to the extent of the deduction 
* Author
[2025] 5 S.C.R. 
1249
Shital Fibers Limited v. Commissioner of Income Tax
claimed u/s.80-IA – s.80-IA(9) does not affect the computability of 
deduction under various provisions under heading C of Chapter 
VI-A, but it affects the allowability of deductions computed under 
various provisions under heading C of Chapter VI-A, so that the 
aggregate deduction u/s.80-IA and other provisions under heading 
C of Chapter VI-A do not exceed 100 per cent of the profits of the 
business of the assessee – Reference answered. [Paras 20-22, 24]
Case Law Cited
Associated Capsules (P) Ltd. v. Deputy Commissioner of Income 
Tax and Anr. (2011) SCC Online Bombay 27 – approved.
Assistant Commissioner of Income Tax, Bangalore v. Micro Labs 
Limited [2015] 11 SCR 1154 : (2015) 17 SCC 96 – referred to.
Friends Casting (P) Ltd. v. Commissioner of Income Tax (2011) 50 
DTR Judgments 61; Great Eastern Exports v. Commissioner of 
Income Tax (2010) SCC OnLine Del 4195 – referred to.
ACIT v. Rogini Garments (2007) SCC OnLine ITAT 159; SCM 
Creations v. ACIT, 304 ITR 319 – referred to.
List of Acts
Income Tax Act, 1961.
List of Keywords
Sub-section 9 of Section 80-IA of Income Tax Act, 1961; Deductions 
claimed; Deductions Under Section 80-HHC, 80-IA and 80-IB; 
Section 80-HHC; Section 80-IA; Scope of restriction under sub-
section 9 of Section 80-IA of Income Tax Act, 1961; Computation 
of deductions; Allowability of deductions; Chapter VI-A; Heading 
C; Profits and gains; Total gross income; Reference; Deduction of 
profits and gains; Deductions in respect of profits and gains from 
industrial undertakings or enterprises; Deductions in respect of 
industrial undertakings.
Case Arising From
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 14318  
of 2015
From the Judgment and Order dated 18.04.2011 of the High Court 
of Punjab & Haryana at Chandigarh in ITA No. 394 of 2010
1250
[2025] 5 S.C.R.
Supreme Court Reports
With
Civil Appeal No(s). 14295, 14299, 14297, 14301, 14304, 14305, 
14309, 14324, 14319, 14313, 14323, 14314, 14322, 14320, 
14337, 14339, 14340, 14346 and 14347 of 2015, SLP (C) No. 
19698, 36539 of 2014, SLP (C) No. 9723 of 2018 and SLP (C) 
No. 28934 of 2019
Appearances for Parties
Advs. for the Appellant:
N Venkatraman, A.S.G., Pankaj Jain, Salil Aggarwal, Ms. Kavita 
Jha, Ajay Vohra, Ms. Kavita Jha, Sr. Advs., Raj Bahadur Yadav, 
Venkatraman Chandrashekhara Bharathi, Udai Khanna, H R Rao, 
Annirudh Sharma Ii, Divya Suri, Sachin Bhardwaj, Ms. Shefali 
Choudhary, Ms. Namita Choudhary, Dr. Rakesh Gupta, Somil 
Agarwal, Ambhoj Kumar Sinha, Madhur Aggarwal, Bhargava  
V. Desai, Shivam Sharma, Akash Shukla, Ms. Usha Nand
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