Motilal Pesticides (I.) Pvt. Ltd. vs Commissioner Of Income-Tax

The Supreme Court addressed the interpretation of Section 80HH of the Income-tax Act, 1961, concerning the entitlement of the appellant to a deduction on gross profit versus net income for the assessment years 1979-80 and 1980-81. The Court held that the deduction must be calculated on net income, reaffirming the ruling in Distributors (Baroda) P. Ltd. v. Union of India, which overruled the previous decision in Cloth Traders (P.) Ltd. v. Addl. CIT. Consequently, the High Court's decision favoring the Revenue was upheld.