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, Cir-11(1), Kolkata vs. M/S. Emami Biotech Ltd., Kolkata

In the result, the appeal of the Revenue is dismissed

ITA 1915/KOL/2017[2011-12]Status: DisposedITAT Kolkata29 Mar 2019AY 2011-12

Bench: Shri P.M. Jagtap, Vice-(Kz) & Shri S.S. Viswanethra Ravi

…venue to contend that the refund of sales tax paid on raw materials or finished products must be treated as revenue receipt in the hands of the assessee. He also relied on the decision of the Hon’ble Supreme Court in the case of CIT –vs.- Chaphalkar Brothers [400 ITR 279] and submitted that the purpose test applied in the case of Sahany Steels & Press Works Limited has been reiterated by the Hon’ble Supreme Court while determining the nature of incentive/assistance. As regards the decision of the Hon’ble Delhi High Court in the case of Bhusan Steels & Strips Limited (supra) relied upon by the ld. D.R. in support…

Maruti Suzuki India Ltd., New Delhi vs. Addl. CIT, New Delhi

Appeal of the assessee is partly allowed for statistical purpose

ITA 467/DEL/2014[2009-10]Status: DisposedITAT Delhi17 Oct 2018AY 2009-10

Bench: Shri R. K. Panda & Ms Suchitra Kamblei.T.A .No. 467/Del/2014 (A.Y 2009-10)

Section 143(3)Section 144CSection 144C(5)Section 43Section 43B

…rt, following the decision of the Supreme Court in the case of Ponni Sugar (supra), held that the subsidy received by the assessee was capital receipt not liable to tax. The following decisions are also to the same effect: • CIT v. Chaphalkar Brothers Pune : 400 ITR 279 (SC) • Sunbeam Auto Pvt. Ltd. v. PCIT : 402 ITR 309 (Del.) • Bougainvillea Multiplex Entertainment Centre (P.) Ltd.: 373 ITR 14 (Del) • CIT vs. Siya Ram Garg (HUF): 237 CTR 21 (P&H) • CIT vs. Talbros Engineering Ltd.: 386 ITR 154 (P&H) • CIT vs Rasoi Ltd.: 335 ITR 438 (Cal.) • DCIT vs. Inox Leisure Ltd.: 351 ITR 314 (Guj) • Garden Silk Mills Ltd.…

ACIT 16(1), Mumbai vs. Inox Leisure Ltd, Mumbai

In the result, appeal of the Revenue is dismissed

ITA 2482/MUM/2017[2012-13]Status: DisposedITAT Mumbai19 Sept 2018AY 2012-13

Bench: Shri G.S. Pannu & Shri Pawan Singhacit- 16(1) M/S Inox Leisure Ltd. Room No. 439, (Erstwhile M/S. Fame India Ltd.), 9Th Floor, Viraj Towers, Near Aayakar Bhavan, M.K. Road, Vs. Churchgate, W.E. Highway, Next To Andheri Mumbai-400020. Flyover, Mumbai-400093. Pan: Aadcs7809P Appellant Respondent

For Appellant: Shri H.N. Singh (DR)For Respondent: Shri Rohan Despande (AR)
Section 253Section 254(1)

…d order followed the decision of Tribunal in assessee’s own case for Assessment Year 2007-08 in ITA no. 6046/Mum/2010 dated 21.08.2015. The ld. AR of the assessee further submits that Hon’ble Supreme Court in case of CIT V/s Chaphalkar Brothers Pune [2018] 400 ITR 279 held that the object of subsidy scheme of State Government is to encourage development of Multiplex Theatre Complexes and such incentives is capital in nature. For Ground No. 2, the ld. AR of the assessee submits that Ground No.2 of the appeal is also covered in favour of the assessee by the decision of Tribunal in assessee’s own case for Assess…

DCIT, Circle - 3(1), Kolkata vs. M/S. Tata Metaliks Limited, Kolkata

ITA 1481/KOL/2017[2011-12]Status: DisposedITAT Kolkata12 Sept 2018AY 2011-12

Bench: Shri S.S.Godara & Dr. A.L. Saini

Section 115JSection 143(3)Section 43B

…ollo Tyres Ltd. vs. CIT (20102) 255 ITR 273/122 taxman 562 has decided the issue in favour of assessee. The ld. AR in support of assessee’s claim also relied on the judgment of Hon'ble Supreme Court in the case of CIT vs.Chaphal Kar Brothers, Pune reported in 400 ITR 279 (SC). He requested the Bench to decide the issue on merit. On the other hand, Ld. DR supported the order of Authorities Below. 13. We have heard the rival contentions of both the parties and perused and carefully considered the material on record; including the judicial pronouncements cited and placed reliance upon. From the foregoing discussion,…

M/S Tata Metaliks Ltd., Kolkata vs. DCIT, Cir-3(1), Kolkata

ITA 1153/KOL/2017[2011-12]Status: DisposedITAT Kolkata12 Sept 2018AY 2011-12

Bench: Shri S.S.Godara & Dr. A.L. Saini

Section 115JSection 143(3)Section 43B

…ollo Tyres Ltd. vs. CIT (20102) 255 ITR 273/122 taxman 562 has decided the issue in favour of assessee. The ld. AR in support of assessee’s claim also relied on the judgment of Hon'ble Supreme Court in the case of CIT vs.Chaphal Kar Brothers, Pune reported in 400 ITR 279 (SC). He requested the Bench to decide the issue on merit. On the other hand, Ld. DR supported the order of Authorities Below. 13. We have heard the rival contentions of both the parties and perused and carefully considered the material on record; including the judicial pronouncements cited and placed reliance upon. From the foregoing discussion,…

Padmavati Wind Energy Pvt.Ltd, Satara vs. Assistant Commissioner of Income Tax, Satara

In the result, all the three appeals of the assessee for assessment years

ITA 899/PUN/2017[2008-09]Status: DisposedITAT Pune07 Sept 2018AY 2008-09

Bench: Shri D. Karunakara Rao, Am & Shri Vikas Awasthy, Jm आयकर अपील सं. / Ita Nos. 897 To 899/Pun/2017 "नधा"रण वष" / Assessment Years : 2006-07 To 2008-09

For Appellant: Shri Prayag JhaFor Respondent: Shri Rajesh Gawli
Section 80I

…s that it received the Sales Tax Benefit under the Scheme of the State Government which was to encourage construction installation of wind mills as a alternative source of electricity. The Supreme Court has held in the case of CIT v Chaphalkar Brothers [2018] 400 ITR 279 (SC) that purpose of the subsidy determines its nature. The assessee's case is covered by this judgment. This issue was not raised in the Grounds of Appeal. This issue is purely of legal nature and no investigation is required into the facts of the case. Therefore, this issue is raised by way of Additional Ground of Appeal. Additional Ground may…

Padmavati Wind Energy Pvt.Ltd, Satara vs. Assistant Commissioner of Income Tax, Satara

In the result, all the three appeals of the assessee for assessment years

ITA 898/PUN/2017[2007-08]Status: DisposedITAT Pune07 Sept 2018AY 2007-08

Bench: Shri D. Karunakara Rao, Am & Shri Vikas Awasthy, Jm आयकर अपील सं. / Ita Nos. 897 To 899/Pun/2017 "नधा"रण वष" / Assessment Years : 2006-07 To 2008-09

For Appellant: Shri Prayag JhaFor Respondent: Shri Rajesh Gawli
Section 80I

…s that it received the Sales Tax Benefit under the Scheme of the State Government which was to encourage construction installation of wind mills as a alternative source of electricity. The Supreme Court has held in the case of CIT v Chaphalkar Brothers [2018] 400 ITR 279 (SC) that purpose of the subsidy determines its nature. The assessee's case is covered by this judgment. This issue was not raised in the Grounds of Appeal. This issue is purely of legal nature and no investigation is required into the facts of the case. Therefore, this issue is raised by way of Additional Ground of Appeal. Additional Ground may…

Padmavati Wind Energy Pvt.Ltd, Satara vs. Assistant Commissioner of Income Tax, Satara

In the result, all the three appeals of the assessee for assessment years

ITA 897/PUN/2017[2006-07]Status: DisposedITAT Pune07 Sept 2018AY 2006-07

Bench: Shri D. Karunakara Rao, Am & Shri Vikas Awasthy, Jm आयकर अपील सं. / Ita Nos. 897 To 899/Pun/2017 "नधा"रण वष" / Assessment Years : 2006-07 To 2008-09

For Appellant: Shri Prayag JhaFor Respondent: Shri Rajesh Gawli
Section 80I

…s that it received the Sales Tax Benefit under the Scheme of the State Government which was to encourage construction installation of wind mills as a alternative source of electricity. The Supreme Court has held in the case of CIT v Chaphalkar Brothers [2018] 400 ITR 279 (SC) that purpose of the subsidy determines its nature. The assessee's case is covered by this judgment. This issue was not raised in the Grounds of Appeal. This issue is purely of legal nature and no investigation is required into the facts of the case. Therefore, this issue is raised by way of Additional Ground of Appeal. Additional Ground may…

M/S Braza Tyres (P) Ltd., Paonta Sahib vs. DCIT, Circle, Shimla

Appeal of the assessee is treated as allowed for statistical purposes

ITA 1417/CHANDI/2017[2013-14]Status: DisposedITAT Chandigarh21 Aug 2018AY 2013-14
For Appellant: Sh. Harry Rikhy, AdvocateFor Respondent: Sh. Surinder Meena, JCIT
Section 14ASection 36Section 80I

…for deduction u/s 80IC of the Act, however, in the additional ground of appeal the assessee relying upon the latest decisions of the Hon'ble Supreme Court in the case of ‘CIT Vs. Shree Balaji Alloys & Ors’ 138 DTR 36 (SC) and ‘CIT Vs. Chaphalkar Brothers (400 ITR 279) has claimed that the said receipt was capital receipt not liable to tax under the provisions of Income Tax Act. 8. The Ld. DR has opposed the taking of this additional ground at this stage. 9. We have considered the rival submissions. We find that the assessee from the very beginning has been contesting the liability to pay tax on the afores…

M/S Chinq Micron Chem (P) Ltd., Paonta Sahib vs. DCIT, Circle, Shimla

Appeal of the assessee is treated as allowed for statistical purposes

ITA 1416/CHANDI/2017[2013-14]Status: DisposedITAT Chandigarh21 Aug 2018AY 2013-14
For Appellant: Sh. Harry Rikhy, AdvocateFor Respondent: Sh. Surinder Meena, JCIT
Section 14ASection 36Section 80I

…for deduction u/s 80IC of the Act, however, in the additional ground of appeal the assessee relying upon the latest decisions of the Hon'ble Supreme Court in the case of ‘CIT Vs. Shree Balaji Alloys & Ors’ 138 DTR 36 (SC) and ‘CIT Vs. Chaphalkar Brothers (400 ITR 279) has claimed that the said receipt was capital receipt not liable to tax under the provisions of Income Tax Act. 8. The Ld. DR has opposed the taking of this additional ground at this stage. 9. We have considered the rival submissions. We find that the assessee from the very beginning has been contesting the liability to pay tax on the afores…

DCIT 9(2)(2), Mumbai vs. Cineline India Ltd, Mumbai

In the result, appeal filed by the revenue for assessment year 2012-2013

ITA 5491/MUM/2016[2012-13]Status: DisposedITAT Mumbai16 May 2018AY 2012-13

Bench: Shri Shamim Yahya (Am) & Shri Ram Lal Negi (Jm) Assessment Year: 2012-13 The Asst. Commissioner Of M/S Cineline India Ltd., 10Th Floor, 251, Atrium, Income Tax- 9(2)(2), C.T.S. No. 215, Room No. 665A, 6Th Floor, Vs. Andheri Kurla Road, Aayakar Bhavan, M.K. Road, Andheri (East), Mumbai - 400020 Mumbai - 400059 Pan : Aaccc1775F (Appellant) (Respondent) Revenue By : Shri Sanjay Singh (Dr) Assessee By : Shri Govind Javeri (Ar) Date Of Hearing: 14/05/2018 Date Of Pronouncement: 16/05/2018

For Appellant: Shri Govind Javeri (AR)For Respondent: Shri Sanjay Singh (DR)
Section 143

…subsidy was to promote construction of multiplex theatre complexes, the subsidy would be on capital account. In further appeal, the Hon’ble Supreme Court has upheld the judgment of the Hon’ble High Court in Commissioner of Income Tax Vs. Chaphalkar Brothers, 400 ITR 279. Since, the order passed by the Ld. CIT (A) is in accordance with the principles of law laid down by the Hon’ble Supreme Court in the aforesaid case and the decisions of coordinate Bench rendered in the assessee’s own case for the A.Y. 2011-12 aforesaid, we do not find any reason to interfere with the findings of the Ld. CIT (A). We therefore uph…

DCIT, Cir-3(1), Kolkata vs. M/S Tata Metaliks Ltd., Kolkata

In the result, Revenue’s appeal is dismissed

ITA 478/KOL/2016[2010-2011]Status: DisposedITAT Kolkata27 Apr 2018AY 2010-2011

Bench: Shri N.V.Vasudevan & Shri Waseem Ahmed

Section 115JSection 139(1)Section 143(3)Section 234C

…ee. The ld. AR in support of assessee’s claim also relied on the judgment of Hon'ble Supreme Court in the ITA No.439 & 478/Kol/2016 A.Y 2010-11 Tata Metaliks Ltd. Vs DCIT Cir.3(1)/ITO Wd.3(2), Kol. Page 13 case of CIT vs.Chaphal Kar Brothers, Pune reported in 400 ITR 279 (SC). He requested the Bench to decide the issue on merit. On the other hand, Ld. DR supported the order of Authorities Below. 13. We have heard the rival contentions of both the parties and perused and carefully considered the material on record; including the judicial pronouncements cited and placed reliance upon. From the foregoing discussion,…

Tata Metaliks Ltd., Kolkata vs. ITO, WD-3(2), Kolkata

In the result, Revenue’s appeal is dismissed

ITA 439/KOL/2016[2010-11]Status: DisposedITAT Kolkata27 Apr 2018AY 2010-11

Bench: Shri N.V.Vasudevan & Shri Waseem Ahmed

Section 115JSection 139(1)Section 143(3)Section 234C

…ee. The ld. AR in support of assessee’s claim also relied on the judgment of Hon'ble Supreme Court in the ITA No.439 & 478/Kol/2016 A.Y 2010-11 Tata Metaliks Ltd. Vs DCIT Cir.3(1)/ITO Wd.3(2), Kol. Page 13 case of CIT vs.Chaphal Kar Brothers, Pune reported in 400 ITR 279 (SC). He requested the Bench to decide the issue on merit. On the other hand, Ld. DR supported the order of Authorities Below. 13. We have heard the rival contentions of both the parties and perused and carefully considered the material on record; including the judicial pronouncements cited and placed reliance upon. From the foregoing discussion,…

Aditya Birla Nuvo Ltd, Mumbai vs. Asst CIT Ltu, Mumbai

In the result, assessee’s appeal is partly allowed

ITA 7062/MUM/2014[1998-99]Status: DisposedITAT Mumbai18 Apr 2018AY 1998-99

Bench: Shri Saktijit Dey & Shri N.K. Pradhan

For Appellant: Shri J.D. Mistry, Sr. Counsel a/wFor Respondent: Ms. Arju Garodia

…tion in the backward areas of the State but also enabling the industries to expand, modernize and diversify the existing unit with the receipt of subsidy. Further, he relied upon the decision of the Hon'ble Supreme Court in CIT v/s Chaphalkar Brothers, [2018] 400 ITR 279, wherein the Hon'ble Supreme Court has held that if the object of granting subsidy was for attracting setting–up of industry then it is to be treated as capital in nature. In support of his contention, the learned Sr. Counsel also relied upon a number of other decisions as well. 7. The learned Departmental Representative submitted, the assessee…

Vista Entertainment P.Ltd, Mumbai vs. ACIT 2(3), Mumbai

In the result, Revenue’s appeal for A

ITA 5768/MUM/2015[2008-09]Status: DisposedITAT Mumbai28 Feb 2018AY 2008-09

Bench: Shri Saktijit Dey & Shri Rajesh Kumar

For Appellant: Shri Salil Kapoor a/wFor Respondent: Ms. Pooja Swaroop
Section 143(3)Section 147Section 148

…o far as the nature of entertainment tax subsidy is concerned, there cannot be any manner of doubt that it is in the nature of capital receipt, hence, not taxable. He submitted, not only the Hon’ble Supreme Court in case of CIT v/s Chaphalkar Brothers, [2018] 400 ITR 279, has held the entertainment tax subsidy provided by the Government to multiplex theatre complexes as capital in nature, but, the Hon'ble Jurisdictional High Court in assessee’s own case has also held so. He submitted, in so far as the issue whether entertainment tax subsidy should be reduced from the cost of assets in terms of Explanation 10 to s…

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

ITA/233/2007HC Calcutta22 Jun 2007

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…