UNION OF INDIA vs M/S. TATA TEA CO. LTD.

The Supreme Court upheld the constitutional validity of Section 115-O of the Income Tax Act, 1961, as inserted by the Finance Act, 1997, affirming the Calcutta High Court's interpretation that additional income tax under this section can only be levied on 40% of the taxable income. The Court clarified that the provision does not impose tax on agricultural income, thus maintaining the legislative competence of the State over agricultural income. The appeals by the Union of India were dismissed, confirming the High Court's ruling without costs.