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

DCIT (Ltu) 1, Mumbai vs. Ambuja Cements Ltd, Mumbai

In the result, the appeal of the revenue is thus dismissed

ITA 3307/MUM/2015[2008-09]Status: DisposedITAT Mumbai07 Nov 2022AY 2008-09
Section 115JSection 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…

Asst CIT Ltu, Mumbai vs. Ambuja Cements Ltd, Mumbai

In the result, the appeal of the revenue is dismissed

ITA 6405/MUM/2013[2007-08]Status: DisposedITAT Mumbai07 Nov 2022AY 2007-08
Section 143(3)Section 28

…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…

Ambuja Cements Ltd ( Formerly Known As Gujarat Ambuja Cements Ltd), Mumbai vs. Addl CIT 3(1), Mumbai

In the result, the appeal of the revenue is thus dismissed

ITA 2428/MUM/2013[2006-07]Status: DisposedITAT Mumbai07 Nov 2022AY 2006-07
Section 115JSection 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…

Addl CIT 3(1), Mumbai vs. Ambuja Cements Ltd ( Formerly Gujarat Ambuja Cements Ltd), Mumbai

In the result, the appeal of the revenue is dismissed

ITA 5927/MUM/2012[2005-06]Status: DisposedITAT Mumbai31 Oct 2022AY 2005-06
Section 143(3)

…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…

Ambuja Cements Ltd ( Formelry Known As Gujarat Ambuja Cements Ltd), Mumbai vs. Addl CIT RG 3(1), Mumbai

In the result, the appeal of the revenue is dismissed

ITA 5883/MUM/2012[2005-06]Status: DisposedITAT Mumbai31 Oct 2022AY 2005-06
Section 143(3)

…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…

ACIT 9(2)(2), Mumbai vs. Cineline India Ltd(Earlier Known As Clinemax India Limited), Mumbai

In the result, the appeal filed by the revenue is dismissed

ITA 5942/MUM/2017[2007-08]Status: DisposedITAT Mumbai04 Oct 2022AY 2007-08

Bench: The Assessing Officer During The Course Of Assessment Proceedings Without Filing Revised Return. Hence, In The First Round, The Said Issue Was Restored Back By The Tribunal To The File Of The Assessing Officer. In The Set Aside Proceedings Also, The Assessing Officer Did Not Accept The Contentions Of The Assessee & Accordingly Assessed Entertainment Tax Subsidy As Revenue Receipt Taxable In The Hands Of The Assessee.

…urt and all those appeals have been dismissed. The Ld A.R further submitted that the decision rendered by Hon’ble Bombay High Court in the case of Chaphalkar Brothers (supra) has since been upheld by the Hon’ble Supreme Court in the very same case reported in 400 ITR 279 (SC). He submitted that the orders passed by the Hon’ble Bombay High Court in the assessee’s own case were also tagged with the above said case of Chaphalkar Brothers before Hon’ble Supreme Court. Accordingly, the Ld A.R submitted that the decision rendered by Ld CIT(A) does not call for any interference. 8. We notice that the Hon’ble Supreme Co…

The Principal Commissioner of Income Tax-4, Kolkata vs. M/S. Krishi Rasayan Exports Pvt. Ltd

The appeal of the Revenue is dismissed with no order as

ITA/120/2018HC Calcutta14 Sept 2022

Bench: : The Hon’Ble Justice T.S. Sivagnanam & The Hon’Ble Justice Supratim Bhattacharya Date : September 14, 2022. Appearance: Mr. Tilak Mitra, Adv. … For Appellant Mr. R.K. Murarka, Sr. Adv. Mr. S.D. Verma, Adv. …For Respondent The Court :- This Appeal Filed By The Revenue Under Section 260A Of The Income Tax Act, 1961 (The `Act’) Is Directed Against The Order Dated 8Th March, 2017 Passed By The Income Tax Appellate Tribunal “A” Bench, Kolkata (Tribunal) In I.T.A. No. 883 & 1018/Kol/2014 For The Assessment Year 2010-2011. The Appeal Was Admitted To Decide The Following Substantial Question Of Law:-

Section 115Section 115JSection 2(24)Section 260A

…tantial question of law involved in this appeal is squarely covered in favour of the assessee and against the revenue in the light of the decision of the Hon’ble Supreme Court in Commissioner of Income-Tax-I, Kolhapur vs. M/s. Chaphalkar Brothers Pune, (2018) 400 ITR 279 (SC). The operative portion of the judgment reads as follows :- “After setting out both the Supreme court judgements referred to hereinabove, the High Court found that the concessions were issued in order to achieve the twin objects of acceleration of industrial development in the State of Jammu and Kashmir and generation of employment in the sai…

Principal Comm of Income Tax 4, Kolkata vs. M/S Krishi Rasayan Exports Pvt Ltd

The appeal of the Revenue is dismissed with no order as

ITA/17/2021HC Calcutta14 Sept 2022

Bench: :

Section 115Section 115JSection 2(24)Section 260A

…tial question of law involved in this appeal is squarely covered in favour of the assessee and against the revenue in the light of the decision of the Hon’ble Supreme Court in Commissioner of Income-Tax-I, Kolhapur vs. M/s. Chaphalkar Brothers Pune, (2018) 400 ITR 279 (SC). The operative portion of the judgment reads as follows :- “After setting out both the Supreme court judgements referred to hereinabove, the High Court found that the concessions were issued in order to achieve the twin objects of acceleration of industrial development in the State of Jammu and Kashmir and generation of employment in th…

Principal Comm of Income Tax 4, Kolkata vs. M/S Krishi Rasayan Exports Pvt Ltd

The appeal of the Revenue is dismissed with no order as

ITA/18/2021HC Calcutta14 Sept 2022

Bench: :

Section 115Section 115JSection 2(24)Section 260A

…tial question of law involved in this appeal is squarely covered in favour of the assessee and against the revenue in the light of the decision of the Hon’ble Supreme Court in Commissioner of Income-Tax-I, Kolhapur vs. M/s. Chaphalkar Brothers Pune, (2018) 400 ITR 279 (SC). The operative portion of the judgment reads as follows :- “After setting out both the Supreme court judgements referred to hereinabove, the High Court found that the concessions were issued in order to achieve the twin objects of acceleration of industrial development in the State of Jammu and Kashmir and generation of employment in th…

Aurangabad Electricals Ltd, Pune vs. Deputy Commissioner of Income-Tax, Circle - 8, Pune

In the result, the appeal of assessee is partly allowed for statistical purposes and the appeal of Revenue is dismissed

ITA 225/PUN/2019[2015-16]Status: DisposedITAT Pune20 Jul 2022AY 2015-16

Bench: Shri Inturi Rama Rao & Shri S.S. Viswanethra Raviआयकर अपीऱ सं. / Ita No.199/Pun/2019 निर्धारण वषा / Assessment Year : 2015-16 The Dy. Commissioner Of Income Tax, Circle-8, Pune .......अऩीऱाथी / Appellant बिधम / V/S. M/S. Aurangabad Electricals Limited, B-7, Midc Chakan, Tal Khed, Pune – 410501 Pan: Aacca2867L ……प्रत्यथी / Respondent

For Appellant: Shri Sharad ShahFor Respondent: Shri Arvind Desai
Section 14A

…ction 2(24)(xviii) is not applicable to the year under consideration, the sequitur is that the subsidy received by the assessee would not form part of its total income. 13. Similarly, the Hon’ble Supreme Court in the case of CIT vs. Chaphalkar Brothers Pune, 400 ITR 297 (SC) after referring to its earlier decision in the case of Ponni Sugars & Chemicals Ltd. (supra) held as under :- “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 specifically held that the point of time at which the subsidy is paid is not rel…

Deputy Commissioner of Income-Tax, Circle - 8, Pune vs. M/S. Aurangabad Electricals Limited, Pune

In the result, the appeal of assessee is partly allowed for statistical purposes and the appeal of Revenue is dismissed

ITA 199/PUN/2019[2015-16]Status: DisposedITAT Pune20 Jul 2022AY 2015-16

Bench: Shri Inturi Rama Rao & Shri S.S. Viswanethra Raviआयकर अपीऱ सं. / Ita No.199/Pun/2019 निर्धारण वषा / Assessment Year : 2015-16 The Dy. Commissioner Of Income Tax, Circle-8, Pune .......अऩीऱाथी / Appellant बिधम / V/S. M/S. Aurangabad Electricals Limited, B-7, Midc Chakan, Tal Khed, Pune – 410501 Pan: Aacca2867L ……प्रत्यथी / Respondent

For Appellant: Shri Sharad ShahFor Respondent: Shri Arvind Desai
Section 14A

…ction 2(24)(xviii) is not applicable to the year under consideration, the sequitur is that the subsidy received by the assessee would not form part of its total income. 13. Similarly, the Hon’ble Supreme Court in the case of CIT vs. Chaphalkar Brothers Pune, 400 ITR 297 (SC) after referring to its earlier decision in the case of Ponni Sugars & Chemicals Ltd. (supra) held as under :- “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 specifically held that the point of time at which the subsidy is paid is not rel…

Narayan Industires, New Delhi vs. ACIT, Circle- 60(1), New Delhi

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

ITA 6153/DEL/2017[2014-15]Status: DisposedITAT Delhi30 Jun 2022AY 2014-15

Bench: Sh. Aakash Deep Jaindr. B. R. R. Kumar

For Appellant: Sh. Rohit Jain, Adv. &For Respondent: Sh. N. K. Bansal, Sr. DR
Section 253

…disbursed. The law in this regard fairly well settled and reference may be- made to the following decisions: • Salmey Steel and Press Works vs. CIT: 228 ITR 253 (SC) • CIT vs. Ponni Sugar and Chemicals Limited. 306 ITR 392 (SC) • CIT vs. Chaphalkar Brothers: 400 ITR 279 (SC) The purpose for which the incentives have been given, it is submitted, can be gauged from the objects and reasons behind introduction of the Policy. If the purpose of the incentive was to enable the assessee to run the business more profitably, then, the receipt is on revenue account. If the object of the assistance was to enable the assesse…

DCIT 3(3)(2), Mumbai vs. Sudal Industries Limited, Mumbai

In the result, appeal filed by the learned assessing officer for assessment year 2013 – 14 is dismissed and appeal filed by the assessee for the same year as well as for the assessment year 2014 – ...

ITA 7271/MUM/2018[2013-14]Status: DisposedITAT Mumbai20 Jun 2022AY 2013-14

Bench: Shri Prashant Maharishi, Am & Shri Pavan Kumar Gadale, Jm The Dy. Commissioner Of Sudal Industries Limited Income Tax, Central Circle 26, Nariman Bhavan, 227, 3(3)(2), Room No. 638, 6Th Nariman Point, Vs. Floor, Aayakar Bhavan, M.K. Mubai-400 021 Road, Mumbai-400 020 (Appellant) (Respondent) Pan No. Aaacs0705K

For Appellant: Shri Ajay Singh,ARFor Respondent: Shri Hoshang B. Irani, DR
Section 115JSection 143(3)Section 36

…IN THE INCOME TAX APPELLATE TRIBUNAL “G” BENCH, MUMBAI BEFORE SHRI PRASHANT MAHARISHI, AM AND SHRI PAVAN KUMAR GADALE, JM The Dy. Commissioner of Sudal Industries Limited Income Tax, Central Circle 26, Nariman Bhavan, 227, 3(3)(2), room No. 638, 6th Nariman Point, Vs. Floor, Aayakar Bhavan, M.K. Mubai-400 021 Road, Mumbai-400 020 (Appellant) (Respondent) PAN No. AAACS0705K ITA Nos. 129/Mum/2019 (Assessment Year 2013-14) ITA Nos. 130/Mum/2019 (Assessment Year 2014-15) The Dy. Commissioner of Sudal Industries Limited Income Tax, Central Circle 26, Nariman Bhavan, 227, 3(3)(2), room No. 638, 6th Nariman Point, Vs…

Deputy Commissioner of Income-Tax, Circle - 1, Nashik vs. Haldex India Pvt.Ltd, Nashik

In the result, the appeal filed by the Revenue stands dismissed

ITA 852/PUN/2019[2014-15]Status: DisposedITAT Pune19 May 2022AY 2014-15

Bench: Shri Inturi Rama Rao & Shri S. S. Viswanethra Raviआयकर अपील सं. / Ita No.852/Pun/2019 िनधा"रण वष" / Assessment Year: 2014-15 Dcit, Circle-1, Nashik Vs. Haldex India Pvt. Ltd., B-71, Midc, Ambad, Nashik- 422010. Pan : Aabch9044B Appellant Respondent Revenue By : Shri S. P. Walimbe Assessee By : Shri R. D. Onkar & Shri Viksit Bhargava Date Of Hearing : 18.05.2022 Date Of Pronouncement : 19.05.2022 आदेश / Order Per Inturi Rama Rao, Am: This Is An Appeal Filed By The Revenue Directed Against The Order Of Ld. Commissioner Of Income Tax (Appeals)- 1, Nashik Dated 01.03.2019 For The Assessment Year 2014-15. 2. The Revenue Raised The Following Grounds Of Appeal :- “01. Whether On The Facts & In The Circumstances Of The Case, The Ld. Cit(A)-1, Nashik Is Justified In Deleting The Addition Of Rs.4,58,41,000/- Made U/S 28(Iv) Of The Act On Account Of Octroi Refund Treating It Revenue In Nature. 02. The Order Of The Cit(A) May Be Vacated & That Of The Assessing Officer May Be Restored. 03. The Assessee Craves Leave To Add, Amend, Alter Or Delete Any Ground Of Appeal.”

For Appellant: Shri R. D. Onkar &For Respondent: Shri S. P. Walimbe
Section 143(3)Section 28

…ection 2(24)(xviii) is not applicable to the year under consideration, the sequitur is that the subsidy received by the assessee would not form part of its total income. 10. Similarly, the Hon’ble Supreme Court in the case of CIT vs. Chaphalkar Brothers Pune, 400 ITR 297 (SC) after referring to its earlier decision in the case of Ponni Sugars & Chemicals Ltd. (supra) held as under :- “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 specifically held that the point of time at which the subsidy is paid is not rele…

Assistant Commissioner of Income-Tax, Circle - 6, Pune vs. M/S. Shriniwas Engineering Auto, Pune

In the result, the appeal of the Revenue is dismissed

ITA 120/PUN/2018[2013-14]Status: DisposedITAT Pune11 May 2022AY 2013-14

Bench: Shri R.S. Syal & Shri Partha Sarathi Chaudhuryassessment Year : 2013-14 The Asstt. Cit Cir. 6, Pune. Appellant Vs. M/S. Shriniwas Engineering Auto C-10 Abhimanshree Society, Baner Road, Pune-411008 Pan : Aajcs 8944F Respondent Appellant By : Shri Hari Krishan Respondent By : Shri R.G. Gawli Date Of Hearing : 09-05-2022 Date Of Pronouncement : 11-05-2022 Order Per Partha Sarathi Chaudhury, Jm

For Appellant: Shri Hari KrishanFor Respondent: Shri R.G. Gawli
Section 32Section 43(1)

…in from the cost of the fixed assets for computing depreciation. Accordingly this inter-connected issue of assessee's appeal is allowed.” 7. We further observe that the relevant observations of the Hon‟ble Apex Court in the case of CIT Vs. Chapalkar Brothers 400 ITR 279 dated 7-12-2017 are as follows: 22. Mr. Ganesh, learned senior counsel, also sought to rely upon a judgment of the Jammu & Kashmir High Court in Shree Balaii Alloys & Ors. vs. CfT (2011) 239 CTR (J&K) 70: (2011) 51 DTR (J&K) 217: (2011) 333 ITR 335 (J&K) . While considering the scheme of refund of excise duty and interest subsidy in that case, it…

Joint CIT (OSD) Cent Cir. 1(4), Mumbai vs. Grasim Industries Ltd., Mumbai

In the result, all the appeals of the Revenue are dismissed

ITA 2155/MUM/2016[1996-97]Status: DisposedITAT Mumbai29 Apr 2022AY 1996-97
Section 143(3)

…t of production in the M/s. Grasim Industries Ltd., 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 & Pres…

Vivimed Labs Limited, Hyderabad vs. 500082 Assistant Commissioner of Income Tax Central Circle2-(3), Hyderabad

ITA 189/HYD/2021[2017-18]Status: DisposedITAT Hyderabad12 Apr 2022AY 2017-18

Bench: Shri S.S. Godara & Shri Laxmi Prasad Sahu

For Appellant: Shri P. Murali Mohan RaoFor Respondent: Shri Y.V.S.T. Sai – CIT DR
Section 143(3)

…the State and so we concur/endorse this finding of Ld CIT(A) on this issue to the same effect. 33. We find that this particular issue is now no longer res integra in light of the decision of the Hon'ble Supreme Court in the case of CIT Vs Chaphalkar Brothers (400 ITR 279) wherein the Supreme Court after analysing the ratio laid down in their earlier judgments in the cases of CIT vs Rajaram Maize Products(supra), M/s Sahney Steel & Press Works Ltd. vs. CIT (supra) and CIT vs. Ponni Sugar & Chemicals Ltd. (supra) held that the subsidies granted under the State Industrial Scheme to accelerate industrial development…

Vivimed Labs Limited, Hyderabad vs. Assistant Commissioner of Income Tax, Hyderabad

ITA 188/HYD/2021[2016-17]Status: DisposedITAT Hyderabad12 Apr 2022AY 2016-17

Bench: Shri S.S. Godara & Shri Laxmi Prasad Sahu

For Appellant: Shri P. Murali Mohan RaoFor Respondent: Shri Y.V.S.T. Sai – CIT DR
Section 143(3)

…the State and so we concur/endorse this finding of Ld CIT(A) on this issue to the same effect. 33. We find that this particular issue is now no longer res integra in light of the decision of the Hon'ble Supreme Court in the case of CIT Vs Chaphalkar Brothers (400 ITR 279) wherein the Supreme Court after analysing the ratio laid down in their earlier judgments in the cases of CIT vs Rajaram Maize Products(supra), M/s Sahney Steel & Press Works Ltd. vs. CIT (supra) and CIT vs. Ponni Sugar & Chemicals Ltd. (supra) held that the subsidies granted under the State Industrial Scheme to accelerate industrial development…

Vivimed Labs Limited, Hyderabad vs. Assistant Commissioner of Income Tax Central Circle2-(3), Hyderabad

ITA 187/HYD/2021[2015-16]Status: DisposedITAT Hyderabad12 Apr 2022AY 2015-16

Bench: Shri S.S. Godara & Shri Laxmi Prasad Sahu

For Appellant: Shri P. Murali Mohan RaoFor Respondent: Shri Y.V.S.T. Sai – CIT DR
Section 143(3)

…the State and so we concur/endorse this finding of Ld CIT(A) on this issue to the same effect. 33. We find that this particular issue is now no longer res integra in light of the decision of the Hon'ble Supreme Court in the case of CIT Vs Chaphalkar Brothers (400 ITR 279) wherein the Supreme Court after analysing the ratio laid down in their earlier judgments in the cases of CIT vs Rajaram Maize Products(supra), M/s Sahney Steel & Press Works Ltd. vs. CIT (supra) and CIT vs. Ponni Sugar & Chemicals Ltd. (supra) held that the subsidies granted under the State Industrial Scheme to accelerate industrial development…

Vivimed Labs Limited, Hyderabad vs. Assistant Commissioner of Income Tax 2(3), Hyderabad

ITA 186/HYD/2021[2014-15]Status: DisposedITAT Hyderabad12 Apr 2022AY 2014-15

Bench: Shri S.S. Godara & Shri Laxmi Prasad Sahu

For Appellant: Shri P. Murali Mohan RaoFor Respondent: Shri Y.V.S.T. Sai – CIT DR
Section 143(3)

…the State and so we concur/endorse this finding of Ld CIT(A) on this issue to the same effect. 33. We find that this particular issue is now no longer res integra in light of the decision of the Hon'ble Supreme Court in the case of CIT Vs Chaphalkar Brothers (400 ITR 279) wherein the Supreme Court after analysing the ratio laid down in their earlier judgments in the cases of CIT vs Rajaram Maize Products(supra), M/s Sahney Steel & Press Works Ltd. vs. CIT (supra) and CIT vs. Ponni Sugar & Chemicals Ltd. (supra) held that the subsidies granted under the State Industrial Scheme to accelerate industrial development…