Modi Industries Ltd. vs. Commissioner of Income Tax

Authored by : Simmi Veerwani*

Citation:

AIR SC 1995 SCC (6) 396, JT 1995 (6) 549

Bench:

Hon’ble Justice B.P. Jeevan Reddy, Hon’ble Justice A.K. Patnaik and Hon’ble Justice Swatantar Kumar.

Title:

Modi Industries Ltd                                        … Petitioner
                                         Versus
Commissioner of   Income Tax, Delhi and Anr.               … Respondent

Jurisdiction:

Supreme Court of India

Laws:

Section 2(24) of the Income Tax Act, 1961

Section 28 of the Income Tax Act, 1961

Section 45 of the Income Tax Act, 1961

Section 56 of the Income Tax Act, 1961

Introduction:

Modi Industries Ltd. V. Commissioner of Income Tax (2012) is a landmark case in Indian corporate law. The case involved a dispute between Modi Industries Ltd. and the Commissioner of Income Tax over the taxability of the company’s income from the sale of carbon credits. The company Modi Industries Ltd. is engaged in the manufacture and sale of steel products. The company had invested in projects to reduce carbon emissions and had obtained carbon credits under the Clean Development Mechanism (CDM) of the United Nations Framework Convention on Climate Change (UNFCCC). Modi Industries Ltd. argued that the income was not taxable because it was a capital receipt and not a revenue receipt. On the other hand, the Commissioner of Income Tax argued that the income was taxable as revenue income. The case was filed to resolve this dispute and determine whether income from the sale of carbon credits is subject to taxation.

Publication date and year: September, 2023

D.O.I Link: https://doi.org/10.59126/v2i4a8

8. Modi vs. Income Tax

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Preferred Citation: Simmi Veerwani, Modi Industries Ltd. vs. Commissioner of Income Tax, Vol. II-IV, pg 62-68 (2023).

* 3rd Year B.B.A. LL.B. student at Amity University, Madhya Pradesh; available at: simmiveerwani30@gmail.com.