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M/S Jagraon Exports v. C.I.T-I Ludhiana

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 5759 of 2012)Decided 18 Feb 2016
Civil Appeal No. 5759 of 2012
Justice Kurian Joseph · Justice Rohinton Fali Nariman

Background

This batch of twelve connected tax appeals all raised the same question: whether the proceeds generated from selling factory scrap should be counted as part of a business's "total turnover" when computing the special export deduction under Section 80HHC of the Income Tax Act, 1961.

Decision Breakdown

The Court relied on its own recent decision in Commissioner of Income Tax vs Punjab Stainless Steel Industries & Ors. ([2014] 364 ITR 144 (SC)), which had already settled that scrap-sale proceeds are not part of "total turnover" for Section 80HHC purposes. Applying that precedent directly, the Court allowed all the appeals in Jagraon Exports' favour without further elaboration.

Lesson Learnt

Money earned from selling scrap material is treated differently from a business's main sales revenue for certain tax-deduction calculations: a useful point for exporters computing turnover-based tax benefits.

Official source (sci.gov.in)View Judgment (PDF)

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