VAPI GREEN ENVIRO LIMITED,VAPI vs. PCIT, VALSAD

ITA 582/SRT/2024Status: DisposedITAT Surat12 August 2025AY 2014-15Bench: SHRI T. R. SENTHIL KUMAR (Judicial Member), SHRI BIJAYANANDA PRUSETH (Accountant Member)1 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the principle of mutuality is applicable to the assessee, and therefore, its income is not taxable. Consequently, disallowance of depreciation is not required. The PCIT's order was set aside.

What were the facts?

The assessee received a grant from the Government of India for acquiring capital assets for a Common Effluent Treatment Plant. The PCIT initiated revision proceedings under Section 263, holding the assessment order to be erroneous and prejudicial to the revenue's interest regarding the treatment of this grant and related depreciation.

What were the issues?

Whether the grant received for capital assets is taxable as revenue income, and whether the principle of mutuality applies to the assessee's income from effluent treatment charges.

Which sections of the Income-tax Act were involved?

Section 263,Section 147,Section 144B,Section 28(iv),Section 40(a)(ia),Section 80IA

AI-generated summary — verify with the full judgment below

Before: SHRI T. R. SENTHIL KUMAR & SHRI BIJAYANANDA PRUSETH

For Appellant: Ms Arti N. Shah, CA
For Respondent: Shri Ashish Pophare, CIT-DR
Hearing: 30/06/2025Pronounced: 12/08/2025

PER BIJAYANANDA PRUSETH, AM: This appeal by the assessee emanates from the order passed under section 263 of the Income-tax Act, 1961 (in short, ‘the Act’), dated 20.03.2024, by the learned Principal Commissioner of Income-tax, Valsad [in short ‘PCIT’] for the Assessment Year (AY) 2014-15. 2. Grounds of appeal raised by the assessee are as under:

“1. The Ld. Principal Commissioner of Income Tax, Valsad, has grossly erred in law as well as on facts and circumstances of the case by passing order u/s. 263 of the I.T. Act, 1961, dated 20.03.2024, holding that the assessment order dated 31.03.2022, passed u/s. 147 r.w.s. 144B of th

The order continues below.

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