Commissioenr Of Income Tax v. M/S Rane Brake Lining Ltd

IN THE HIGH COURT OF JUDICATURE AT MADRAS

DATED: 12.06.2025 CORAM :

THE HON'BLE MR.K.R.SHRIRAM, CHIEF JUSTICE AND THE HON'BLE MR.JUSTICE SUNDER MOHAN Commissioner of Income Tax - LTU Chennai Appellant Vs M/s.Rane Brake Lining Ltd (Formerly Known as Rane Brake Linings Ltd) "Maithri" 132, Cathedral Road Chenai-600 086 Respondent Prayer: Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal "A" Bench, Chennai, dated 04.06.2010 in ITA No.105/Mds/2009.

For Appellant:

Ms.V.Pushpa Sr. Standing Counsel For Respondent:

Mr.R.Vijayaraghavan for M/s.Subbaraya Aiyar Padmanabhan Ramamani

JUDGMENT

(Delivered by the Hon'ble Chief Justice) The appeal impugns the order dated 04.06.2010 passed by the Income Tax Appellate Tribunal (ITAT) "A"Bench, Chennai.

2. Appeal was admitted on 21.12.2010 on the following substantial questions of law:

"1.Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in holding that the deduction u/s.80HHC had to be given without reducing the deduction u/s.80IB?

2. Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in holding that the scrap sales could not be included in the total turnover for the purpose of computation of deduction u/s.80HHC?"

3. The first question of law as framed in this appeal is squarely covered by the judgment of the Apex Court in the case of Shital Fibers Limited v. Commissioner of Income Tax1, where the Apex Court while approving the view taken by the Bombay High Court in the case of Associated Capsules (P) Ltd. v. Deputy Commissioner of Income Tax and another2, which was approved by the Apex Court in the case of Assistant Commissioner of Income Tax, Bangalore v. Micro Labs Limited3, has held that deduction under Section 80HHC of the Income Tax Act, 1961 (the Act) had to be given without reducing the deduction under Section 80IB of the Act.

4. As regards the second question of law, the Apex Court in the case of Commissioner of Income-tax-VII, New Delhi v. Punjab Stainless Steel Industries4 has held that the proceeds generated from the sale of scrap could not be included in total turnover for the purpose of computation of deduction under Section 80HHC of the Act.

2025 SCC OnLine SC 1178 (2011) SCC OnLine Bombay 27 (2015) 17 SCC 96 [2014] 46 taxmann.com 68 (SC)

4. The questions of law are, therefore, answered in the affirmative. Appeal is dismissed accordingly. There shall be no order as to costs. (K.R.SHRIRAM, CJ.) (SUNDER MOHAN, J.) 12.06.2025 Index :

Yes :

Yes bbr To:

1. The Assistant Registrar Income Tax Appellate Tribunal "A" Bench, Chennai.

2. The Commissioner of Income Tax (A)-V Chennai.

3. The Income Tax Officer (OSD) Company Range V(3) Chennai

THE HON'BLE CHIEF JUSTICE AND SUNDER MOHAN,J.

bbr 12.06.2025