NECTAR BEVERAGES PVT. LTD. vs DEPUTY COMMNR. OF INCOME TAX

The Supreme Court ruled that the deletion of Section 41(2) of the Income Tax Act, 1961, which dealt with balancing charges, precludes the taxation of sale proceeds from 100% depreciated assets under Section 41(1). The Court held that the Department's attempt to tax the proceeds as business income under Section 41(1) was not permissible, as the legislative intent was clear in excluding balancing charges post-1988. Consequently, the appeals were allowed, and the Department's assessment was set aside.