No Double Benefits: Supreme Court Clarifies Double Deduction Rules Under Income Tax Act
The Supreme Court ruled that Section 80-IA(9) of the Income Tax Act, 1961, bars double deductions on the same profits under both Sections 80-IA and 80-HHC. It held that while deductions can be computed separately under different provisions, the total deduction cannot exceed the eligible profits of the business. The Court upheld the Bombay High Court’s interpretation, clarifying that Section 80-IA(9) restricts the allowability—not computation—of deductions, ensuring taxpayers do not claim overlapping benefits under Chapter VI-A.
Facts Of The Case:
The case involved Shital Fibers Limited, which filed its income tax return for the Assessment Year 2002-03, declaring a taxable income of ₹46,99,293 and claiming deductions under Sections 80-HHC (export profits) and 80-IA (industrial undertaking...