{"id":211184,"date":"2019-03-01T19:41:57","date_gmt":"2019-03-01T14:11:57","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=211184"},"modified":"2019-03-06T13:20:18","modified_gmt":"2019-03-06T07:50:18","slug":"motilal-pesticides-overruled-as-it-missed-the-difference-in-the-terms-income-and-gross-total-income","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2019\/03\/01\/motilal-pesticides-overruled-as-it-missed-the-difference-in-the-terms-income-and-gross-total-income\/","title":{"rendered":"Motilal Pesticides overruled as it missed the difference in the terms \u2018Income\u2019 and \u2018Gross Total Income\u2019"},"content":{"rendered":"

Supreme Court<\/strong>: The 3-judge bench of Dr. AK Sikri<\/strong>, SA Nazeer and MR Shah, JJ decided an issue relating to interpretation of Section 80HH of the Income Tax Act, 1961 referred to it by a division bench in 2014 and that the decision of the Court in Motilal Pesticides (I) Pvt. Ltd. vs. Commissioner of Income Tax, Delhi-II, (2000) 9 SCC 63<\/a><\/em>, was erroneous.<\/p>\n

The issue before the Court was\u201d<\/p>\n

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\u201cwhile computing the deduction whether it is to be available out of \u2018income\u2019 as computed under the Income Tax Act, 1961 or out of \u2018profits and gains\u2019, without deducting therefrom \u2018depreciation\u2019 and \u2018investment allowance\u2019.\u201d<\/p>\n<\/blockquote>\n

The Court discussed the scheme of the Act at length and said:<\/p>\n

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\u201cReading of Section 80HH along with Section 80A would clearly signify that such a deduction has to be of gross profits and gains, i.e., before computing the income as specified in Sections 30 to 43D of the Act.\u201d<\/p>\n<\/blockquote>\n

It said that the scheme itself draws distinction between the concept \u2018income\u2019 on the one hand and \u2018profits and gains\u2019 on the other hand. Below is the point-wise summary of how the Court explained the scheme of the Act in order to reach the abovementioned conclusion:<\/p>\n