CIT v. Chaphalkar Brothers

400 ITR 279Supreme Court of India2018#749 most cited

What is CIT v. Chaphalkar Brothers authority for?

A subsidy is classified as a capital receipt if its object is to enable the assessee to set up or expand a new or existing unit. Conversely, it is a revenue receipt if its purpose is to help the assessee run the business more profitably.

136

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2007 to 2026.

Also referred to as

CIT v. Chaphalkar Brothers · subsidy classification · capital receipt · revenue receipt · purpose test for subsidies · Section 2(24)(xviii) · Section 43(1) · additional depreciation

Sections most often in play

Section 115JBSection 143(3)Section 14ASection 153ASection 139(5)Section 147Section 132Section 139(1)
Read the full judgment

Issues it is cited on

section 11bsection 2(24)(xviii)convertible foreign exchangesection 2(45)section 32(1)(iia)section 158bb(1)section 43(1)explanation to section 37section 153a(1)(a)additional depreciationbenchmarking analysissection 2(24)

Judgments citing CIT v. Chaphalkar Brothers

Commissioner of Income Tax-IV vs. Mis Indo Rama Synthetics Ltd

The appeals are disposed of in the aforesaid terms

ITA/396/2014HC Delhi23 Jan 2024

Bench: CASES PERTAINING TO SPL.DIVISION BENCHES

…ITA 392/2014 & connected appeals Page 12 of 23 DHC:4438-DB; CIT v. Ponni Sugars and Chemicals Ltd., (2008) 306 ITR 392 (SC) and CIT v. Chaphalkar Brothers, [2018] 400 ITR 279 (SC), are distinguishable on facts. In paragraph 16 of the judgment rendered in Ponni Sugar’s case, the Supreme Court noted that the facts found in Sahney Steel were different. It was noticed that Ponni Sugar, i.e., the appellant, was free to use the money received in its business activity as per its requirements. Likewise, in Chaphalkar Bro…

Commissioner of Income Tax-IV vs. Mis Indo Rama Textiles Ltd

The appeals are disposed of in the aforesaid terms

ITA/392/2014HC Delhi23 Jan 2024

Bench: CASES PERTAINING TO SPL.DIVISION BENCHES

…ITA 392/2014 & connected appeals Page 12 of 23 DHC:4438-DB; CIT v. Ponni Sugars and Chemicals Ltd., (2008) 306 ITR 392 (SC) and CIT v. Chaphalkar Brothers, [2018] 400 ITR 279 (SC), are distinguishable on facts. In paragraph 16 of the judgment rendered in Ponni Sugar’s case, the Supreme Court noted that the facts found in Sahney Steel were different. It was noticed that Ponni Sugar, i.e., the appellant, was free to use the money received in its business activity as per its requirements. Likewise, in Chaphalkar Bro…

Commissioner of Income Tax-IV vs. Mis Indo Rama Synthetics Ltd

The appeals are disposed of in the aforesaid terms

ITA/397/2014HC Delhi23 Jan 2024

Bench: CASES PERTAINING TO SPL.DIVISION BENCHES

…ITA 392/2014 & connected appeals Page 12 of 23 DHC:4438-DB; CIT v. Ponni Sugars and Chemicals Ltd., (2008) 306 ITR 392 (SC) and CIT v. Chaphalkar Brothers, [2018] 400 ITR 279 (SC), are distinguishable on facts. In paragraph 16 of the judgment rendered in Ponni Sugar’s case, the Supreme Court noted that the facts found in Sahney Steel were different. It was noticed that Ponni Sugar, i.e., the appellant, was free to use the money received in its business activity as per its requirements. Likewise, in Chaphalkar Bro…

Commissioner of Income Tax-IV vs. Mis Indo Rama Synthetics (I) Ltd

The appeals are disposed of in the aforesaid terms

ITA/394/2014HC Delhi23 Jan 2024

Bench: CASES PERTAINING TO SPL.DIVISION BENCHES

…ITA 392/2014 & connected appeals Page 12 of 23 DHC:4438-DB; CIT v. Ponni Sugars and Chemicals Ltd., (2008) 306 ITR 392 (SC) and CIT v. Chaphalkar Brothers, [2018] 400 ITR 279 (SC), are distinguishable on facts. In paragraph 16 of the judgment rendered in Ponni Sugar’s case, the Supreme Court noted that the facts found in Sahney Steel were different. It was noticed that Ponni Sugar, i.e., the appellant, was free to use the money received in its business activity as per its requirements. Likewise, in Chaphalkar Bro…

Cornmisstorrer of Income Tax-IV vs. Mis Indo Rama Synthetics Ltd

The appeals are disposed of in the aforesaid terms

ITA/398/2014HC Delhi23 Jan 2024

Bench: CASES PERTAINING TO SPL.DIVISION BENCHES

…ITA 392/2014 & connected appeals Page 12 of 23 DHC:4438-DB; CIT v. Ponni Sugars and Chemicals Ltd., (2008) 306 ITR 392 (SC) and CIT v. Chaphalkar Brothers, [2018] 400 ITR 279 (SC), are distinguishable on facts. In paragraph 16 of the judgment rendered in Ponni Sugar’s case, the Supreme Court noted that the facts found in Sahney Steel were different. It was noticed that Ponni Sugar, i.e., the appellant, was free to use the money received in its business activity as per its requirements. Likewise, in Chaphalkar Bro…

Commissioner of Income Tax, Kolkata-II, Kolkata vs. M/S. Birla Corporation Ltd

ITA/158/2010HC Calcutta18 Dec 2023

Bench: : The Hon’Ble Justice Surya Prakash Kesarwani

Section 4A

…1 A.F.R. OD – 24 & 25 IN THE HIGH COURT AT CALCUTTA Special Jurisdiction [Income Tax] ORIGINAL SIDE ITA/158/2010 COMMISSIONER OF INCOME TAX, KOLKATA – II, KOLKATA -Versus- M/S. BIRLA CORPORATION LTD. ITA/233/2007 COMMISSIONER OF INCOME TAX, KOLKATA – I, KOLKATA -Versus- M/S. BIRLA CORPORATION LTD. BEFORE : THE HON’BLE JUSTICE SURYA PRAKASH KESARWANI And THE HON’BLE JUSTICE RAJARSHI BHARADWAJ Date : 18th December, 2023 Appearance : Sri Tilak Mitra, Adv. ..for…

Tata Chemicals Ltd, Mumbai vs. Addl Ciat 2(3), Mumbai

In the result, appeal filed by the assessee is partly allowed

ITA 120/MUM/2013[2008-09]Status: DisposedITAT Mumbai10 Nov 2023AY 2008-09

Bench: Shri Vikas Awasthy, Hon'Ble & Shri S. Rifaur Rahman, Hon'Ble

Section 144C(5)Section 14ASection 43BSection 80

…y the concerned government. In this regard, reliance is placed on judgments of the Hon'ble Apex Court in Ponni Sugars and Chemicals Limited 306 ITR 392, MEPCO Industries Limited 319 ITR 208, Shree Balaji Alloys (2016) 80 taxman.com 239 and Chaphalkar Brothers 400 ITR 279 and the Bombay High Court in Kirloskar Oil Engine Ltd. 364 ITR 88. As stated above, the object and purpose of the New Incentive Policy Capital Investment Incentive (General) Scheme 1995-2000 of the Government of Gujarat was acceleration of development in the backward areas within the state of Gujarat, creation of large scale employment opportunit…

ACIT, Circle - 7(1), Kolkata vs. M/S. Britannia Industries Ltd., Kolkata

In the result, appeal of the revenue in ITA No

ITA 2644/KOL/2018[2014-15]Status: DisposedITAT Kolkata27 Oct 2023AY 2014-15

Bench: Dr. Manish Borad, Hon’Ble & Shri Sonjoy Sarma, Hon’Ble

For Appellant: Shri N.S. Saini, A/RFor Respondent: Shri Abhijit Kundu, CIT, D/R and Shri G
Section 115Section 143(2)Section 14ASection 250Section 92C

…ent of VAT/sales tax. The ld. CIT(A) dealt with this issue referring to the various judicial pronouncements and held in favour of assessee by placing reliance on the judgment of the Hon’ble Supreme Court in the case of CIT v/s. Chaphalkar Brothers Pune [2018] 400 ITR 279 as well as that of the Hon’ble Jurisdictional High Court in the case of CIT vs Rasoi Limited [2011] 335 ITR 438 (Cal) (HC). 17.1. On going through the above, and judicial precedents referred in the impugned order and after perusal of the Industrial policies of the Governments of Bihar and Odisha, we find that firstly introduction of amendment in…

The Supreme Industrial Ltd, Mumbai vs. Asst CIT Ltu Circle, Mumbai

In the result, the appeal of the assessee is partly allowed

ITA 7598/MUM/2019[2015-16]Status: DisposedITAT Mumbai03 Oct 2023AY 2015-16

Bench: Shri Aby T. Varkey, Jm & Shri S. Rifaur Rahman, Am आयकर अपील सं/ I.T.A. No. 7598/Mum/2019 (निर्धारण वर्ा / Assessment Year: 2015-16) The Supreme Industries Ltd. Acit Ltu, Circle, बिधम/ 612, Raheja Chambers, Free Mumbai Vs. Press Journal Marg, Room No. X, 29Th Floor, Nariman Point, Mumbai- World Trade Centre-1, 400021. Cuffee Parade, Mumbai- 400005. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aaact1344F (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Nitesh Joshi & Shri Harsh Shah Revenue By: Shri Manoj Kumar (Cit- Dr) सुनवाई की तारीख / Date Of Hearing: 07/07/2023 घोषणा की तारीख /Date Of Pronouncement: 03/10/2023 आदेश / O R D E R

For Appellant: Shri Nitesh Joshi & Shri Harsh ShahFor Respondent: Shri Manoj Kumar (CIT- DR)
Section 143(3)Section 17(1)Section 197Section 40ASection 40A(2)Section 40A(2)(b)Section 92BSection 92C

…t up or 15 A.Y. 2015-16 Supreme Industries Ltd. expand the existing unit or capital base, then such subsidy is capital in nature. The view is noted to have endorsed by the Hon'ble Supreme Court in its latter decision in the case of CIT vs. Chapalkar Brothers (400 ITR 279). In the decided case, the Hon’ble Apex Court explained the principle that the subsidy granted by the Government to achieve the object of acceleration of industrial development shall be capital in nature. 14. Having regard to the above principle as laid down by Hon’ble Supreme Court (supra), it is noted that this Tribunal in assessee’s own case…

DCIT, Circle- 1(1), Gurgaon vs. Cinepolis India Pvt. Ltd. (Successor to Fun Multiplex Pvt. Ltd.), Gurgaon

In the result Revenue’s appeal as well as assessee’s cross-objection stand dismissed

ITA 4021/DEL/2018[2014-15]Status: DisposedITAT Delhi30 Aug 2023AY 2014-15

Bench: Shri Kul Bharat & Dr. B.R.R. Kumarassessment Year: 2014-15

Section 143(3)

…nos. 3630/Del/2019, 3631/Del/2019 & ITA 6317/Del/2017 respectively. Learned counsel also submitted that the issue in question is squarely covered in favour of the assessee by decision of the Hon’ble Supreme Court in the case of CIT Vs. Chapalkar Brothers (400 ITR 279). 10. We have heard rival submissions and perused the material available on record. The learned CIT(Appeals) has adjudicated the ground, inter alia, by observing as under: “6.3 I have carefully considered the facts of the case, oral contentions and written submission of the assessee, discussion of the AO in the assessment order and material ava…

Acc Limited, Mumbai vs. DCIT (Ltu), Mumbai

In the result, appeal filed by department is dismissed

ITA 800/MUM/2022[2013-14]Status: DisposedITAT Mumbai30 Jun 2023AY 2013-14

Bench: Shri S. Rifaur Rahman, Hon'Ble & Ms Kavitha Rajagopal, Hon'Blem/S. Acc Limited V. Dcit (Ltu) 121, Cement House, M.K. Road 29Th Floor, Center-1 Churchgate, Mumbai-400020 World Trade Centre, Cuffe Parade Mumbai - 400005 Pan: Aaact1507C (Appellant) (Respondent) Asst. Cit – 3(4) V. M/S. Acc Limited 29Th Floor, Center-1 Cement House,121, M.K. Road World Trade Centre, Cuffe Parade Churchgate, Mumbai-400020 Mumbai-400005 Pan: Aaact1507C (Appellant) (Respondent)

Section 14A

…d from the date of commencement of production in the assessee's factory. The subsidies are operational subsidies and not capital subsidies. 5.3.6. Yet another decision was rendered by Hon’ble Supreme Court in the case of CIT vs. Chapalkar Brothers reported in 400 ITR 279 which held that where the object of respective subsidy schemes of State Government was to encourage development of multiple theatre complexes, incentives would be held to be capital in nature and not revenue receipts. The relevant operative portion of the judgment is reproduced hereunder:- 18. After discussing the judgment in Sahney Steel & Press…

Asst. Commissioner of Income Tax-3(4), Mumbai-400005 vs. M/S. Acc Limited, Mumbai-400020

In the result, appeal filed by department is dismissed

ITA 1171/MUM/2022[2013-14]Status: DisposedITAT Mumbai30 Jun 2023AY 2013-14

Bench: Shri S. Rifaur Rahman, Hon'Ble & Ms Kavitha Rajagopal, Hon'Blem/S. Acc Limited V. Dcit (Ltu) 121, Cement House, M.K. Road 29Th Floor, Center-1 Churchgate, Mumbai-400020 World Trade Centre, Cuffe Parade Mumbai - 400005 Pan: Aaact1507C (Appellant) (Respondent) Asst. Cit – 3(4) V. M/S. Acc Limited 29Th Floor, Center-1 Cement House,121, M.K. Road World Trade Centre, Cuffe Parade Churchgate, Mumbai-400020 Mumbai-400005 Pan: Aaact1507C (Appellant) (Respondent)

Section 14A

…d from the date of commencement of production in the assessee's factory. The subsidies are operational subsidies and not capital subsidies. 5.3.6. Yet another decision was rendered by Hon’ble Supreme Court in the case of CIT vs. Chapalkar Brothers reported in 400 ITR 279 which held that where the object of respective subsidy schemes of State Government was to encourage development of multiple theatre complexes, incentives would be held to be capital in nature and not revenue receipts. The relevant operative portion of the judgment is reproduced hereunder:- 18. After discussing the judgment in Sahney Steel & Press…

Parag Milk Foods Pvt. Ltd, Pune vs. Deputy Commissioner of Income-Tax, Central Circle -1 (1), Pune

In the result, both the appeals of the assessee are partly allowed for statistical purposes

ITA 757/PUN/2019[2014-15]Status: DisposedITAT Pune27 Jun 2023AY 2014-15

Bench: Shri Inturi Rama Rao & Shri Partha Sarathi Chaudhury, Hon.

For Appellant: Shri Suhas P. Bora, CAFor Respondent: Shri M.G. Jasnani, DR
Section 14ASection 28Section 43(1)

…nce. 6. We find that Pune tribunal on this issue in the case of DCIT v. Haldex India Pvt. Ltd. in ITA No. 852/PUN/2019, dated 19/05/2022 by Parag Milk Foods Pvt. Ltd. applying the ratio of the Hon'ble Supreme Court in the case of CIT vs. Chaphalkar Brothers, 400 ITR 297 (SC) after referring to its earlier decision in the case of CIT vs. Ponni Sugars & Chemicals Ltd., 306 ITR 392 (SC) has held that since the subsidy was granted actually as an incentive for development and formation of industries in the less developed areas of the State of Maharashtra, the subsidy cannot be treated as revenue receipt. The relevant…

Parag Milk Foods Pvt. Ltd, Pune vs. Deputy Commissioner of Income-Tax, Central Circle -1 (1), Pune

In the result, both the appeals of the assessee are partly allowed for statistical purposes

ITA 756/PUN/2019[2013-14]Status: DisposedITAT Pune27 Jun 2023AY 2013-14

Bench: Shri Inturi Rama Rao & Shri Partha Sarathi Chaudhury, Hon.

For Appellant: Shri Suhas P. Bora, CAFor Respondent: Shri M.G. Jasnani, DR
Section 14ASection 28Section 43(1)

…nce. 6. We find that Pune tribunal on this issue in the case of DCIT v. Haldex India Pvt. Ltd. in ITA No. 852/PUN/2019, dated 19/05/2022 by Parag Milk Foods Pvt. Ltd. applying the ratio of the Hon'ble Supreme Court in the case of CIT vs. Chaphalkar Brothers, 400 ITR 297 (SC) after referring to its earlier decision in the case of CIT vs. Ponni Sugars & Chemicals Ltd., 306 ITR 392 (SC) has held that since the subsidy was granted actually as an incentive for development and formation of industries in the less developed areas of the State of Maharashtra, the subsidy cannot be treated as revenue receipt. The relevant…

Assistant Commissioner of Income-Tax, Circle - 4, Pune vs. Parag Milk Foods Pvt.Ltd, Pune

In the result, both the appeals of the assessee are partly allowed for statistical purposes

ITA 489/PUN/2019[2014-15]Status: DisposedITAT Pune27 Jun 2023AY 2014-15

Bench: Shri Inturi Rama Rao & Shri Partha Sarathi Chaudhury, Hon.

For Appellant: Shri Suhas P. Bora, CAFor Respondent: Shri M.G. Jasnani, DR
Section 14ASection 28Section 43(1)

…nce. 6. We find that Pune tribunal on this issue in the case of DCIT v. Haldex India Pvt. Ltd. in ITA No. 852/PUN/2019, dated 19/05/2022 by Parag Milk Foods Pvt. Ltd. applying the ratio of the Hon'ble Supreme Court in the case of CIT vs. Chaphalkar Brothers, 400 ITR 297 (SC) after referring to its earlier decision in the case of CIT vs. Ponni Sugars & Chemicals Ltd., 306 ITR 392 (SC) has held that since the subsidy was granted actually as an incentive for development and formation of industries in the less developed areas of the State of Maharashtra, the subsidy cannot be treated as revenue receipt. The relevant…

Assistant Commissioner of Income-Tax, Circle - 4, Pune vs. Parag Milk Foods Private Limited, Pune

In the result, both the appeals of the assessee are partly allowed for statistical purposes

ITA 488/PUN/2019[2013-14]Status: DisposedITAT Pune27 Jun 2023AY 2013-14

Bench: Shri Inturi Rama Rao & Shri Partha Sarathi Chaudhury, Hon.

For Appellant: Shri Suhas P. Bora, CAFor Respondent: Shri M.G. Jasnani, DR
Section 14ASection 28Section 43(1)

…nce. 6. We find that Pune tribunal on this issue in the case of DCIT v. Haldex India Pvt. Ltd. in ITA No. 852/PUN/2019, dated 19/05/2022 by Parag Milk Foods Pvt. Ltd. applying the ratio of the Hon'ble Supreme Court in the case of CIT vs. Chaphalkar Brothers, 400 ITR 297 (SC) after referring to its earlier decision in the case of CIT vs. Ponni Sugars & Chemicals Ltd., 306 ITR 392 (SC) has held that since the subsidy was granted actually as an incentive for development and formation of industries in the less developed areas of the State of Maharashtra, the subsidy cannot be treated as revenue receipt. The relevant…

DCIT Central Circle-31, New Delhi vs. Maral Overseas Ltd, West Nirmar

In the result, the appeal of the Assessee in ITA No

ITA 1922/DEL/2020[2015-16]Status: DisposedITAT Delhi17 May 2023AY 2015-16
Section 132Section 14A

…& Press Works Ltd. v. CIT [1997) 94 Taxman 368/228 ITR 253 (SC) to CIT v. Ponni Sugars 8s Chemicals Ltd. [20081 174 Taxman 87 /306 ITR 392(SC) DCIT Vs. Maral Overseas Ltd. and to the latest decision in the case of CIT(A) v. Chaphalkar Brothers Pune / [2018] 400 ITR 279 (SC) wherein the PURPOSE TEST was held to be ultimate test to decide the character of subsidy in the hands of the assessee. The relevant finding in the case of CIT v. Chaphalkar Brothers: “21. What is important from the ratio of this judgment is the fact that Sahney Steel was followed and the test laid down was the "purpose test". It was specifi…

DCIT Central Circle-31, New Delhi vs. Maral Overseas Ltd, West Nirmar

In the result, the appeal of the Assessee in ITA No

ITA 1921/DEL/2020[2014-15]Status: DisposedITAT Delhi17 May 2023AY 2014-15
Section 132Section 14A

…& Press Works Ltd. v. CIT [1997) 94 Taxman 368/228 ITR 253 (SC) to CIT v. Ponni Sugars 8s Chemicals Ltd. [20081 174 Taxman 87 /306 ITR 392(SC) DCIT Vs. Maral Overseas Ltd. and to the latest decision in the case of CIT(A) v. Chaphalkar Brothers Pune / [2018] 400 ITR 279 (SC) wherein the PURPOSE TEST was held to be ultimate test to decide the character of subsidy in the hands of the assessee. The relevant finding in the case of CIT v. Chaphalkar Brothers: “21. What is important from the ratio of this judgment is the fact that Sahney Steel was followed and the test laid down was the "purpose test". It was specifi…

DCIT(Ltu) - 1, Mumbai vs. Acc Ltd., Mumbai

In the result, appeal filed by assessee is partly allowed and appeal filed by the revenue is dismissed

ITA 3178/MUM/2019[2011-12]Status: DisposedITAT Mumbai28 Feb 2023AY 2011-12

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Sandeep Singh Karhail, Hon'Ble

Section 14Section 143(3)Section 14A

…d from the date of commencement of production in the assessee's factory. The subsidies are operational subsidies and not capital subsidies. 5.3.6. Yet another decision was rendered by Hon’ble Supreme Court in the case of CIT vs. Chapalkar Brothers reported in 400 ITR 279 which held that where the object of respective subsidy schemes of State Government was to encourage development of multiple theatre complexes, incentives would be held to be capital in nature and not revenue receipts. The relevant operative portion of the judgment is reproduced hereunder:- 18. After discussing the judgment in Sahney Steel & Press…

DCIT(Ltu) - 1, Mumbai vs. Acc Ltd., Mumbai

In the result, appeal filed by assessee is partly allowed

ITA 3177/MUM/2019[2010-11]Status: DisposedITAT Mumbai28 Feb 2023AY 2010-11

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Sandeep Singh Karhail, Hon'Ble

Section 143(3)Section 147Section 148Section 151

…d from the date of commencement of production in the assessee's factory. The subsidies are operational subsidies and not capital subsidies. 5.3.6. Yet another decision was rendered by Hon’ble Supreme Court in the case of CIT vs. Chapalkar Brothers reported in 400 ITR 279 which held that where the object of respective subsidy schemes of State Government was to encourage development of multiple theatre complexes, incentives would be held to be capital in nature and not revenue receipts. The relevant operative portion of the judgment is reproduced hereunder:- 18. After discussing the judgment in Sahney Steel & Press…