CIT v. P.J. Chemicals Ltd.

210 ITR 830Supreme Court of India1994#622 most cited

What is CIT v. P.J. Chemicals Ltd. authority for?

This Supreme Court decision clarifies the conditions under which a capital subsidy received by an assessee should be reduced from the 'actual cost' of an asset for computing depreciation under Section 43(1) of the Income-tax Act, depending on whether the subsidy directly meets the cost of the asset.

158

judgments rely on this decision, according to BharatTax’s citation analysis of 367,735 Indian tax judgments — from 2007 to 2026.

Also referred to as

CIT v. P.J. Chemicals Ltd. · P.J. Chemicals · section 43(1) · actual cost · capital subsidy · reduction from cost of assets · depreciation allowance · section 32 · written down value · purpose of subsidy

Also reported as

121 CTR 20176 Taxmann 611

Sections most often in play

Section 43(1)Section 143(3)Section 32Section 2(24)(xviii)Section 143(2)Section 153ASection 234BSection 234C
Read the full judgment

Issues it is cited on

section 2(24)(xviii)section 32(1)(i)section 43(1)initial assessment yearsection 32(1)(iia)section 80hminimum alternate taxwritten down valueblock of assetssection 43asection 143(1)(a)(ii)section 80hh

Judgments citing CIT v. P.J. Chemicals Ltd.

Chaitanya Steelshape Private Limited, Jalgaon vs. Income Tax Officer, Ward-1(2), Jalgaon

In the result, the appeal is allowed

ITA 792/PUN/2023[2010-11]Status: DisposedITAT Pune28 Jul 2023AY 2010-11

Bench: Shri R.S. Syal

Section 250

…IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT आयकर अपील सं. /ITA No.792/PUN/2023 "नधा"रण वष" / Assessment Year : 2010-11 Chaitanya Steelshape Private Limited, Vs. ITO, G-95, MIDC, Jalgaon – 425 003 Ward-1(2), Maharashtra Jalgaon PAN : AABCC4388B Appellant Respondent Assessee by Shri Bhushan R. Patil Revenue by Shri Ajay D. Kulkarni Date of hearing 27-07-2023 Date of pronouncement 28-07-2023 आदेश / ORDER PER R.S. SYAL, VP: This appeal by the assessee emanates from the order dated 11-05-2023 passed by the CIT(A) in National Faceless Appeal Centre, Delhi u/s.250 o…

Principal Commissioner of Income Tax Delhi 4 vs. Nestle India Ltd

ITA/303/2023HC Delhi04 Jul 2023

Bench: HON'BLE MR. JUSTICE RAJIV SHAKDHER,HON'BLE MR. JUSTICE GIRISH KATHPALIA

Section 143(1)Section 14A

…measure adopted for calculating the quantum of subsidy and the purpose for which the subsidy was granted to the respondent/assessee. In reaching this conclusion, the Tribunal relied upon the judgement of the Supreme Court in CIT v P.J. Chemicals Ltd, 1994 210 ITR 830 (SC). 13.2 Qua the first limb of the issue, i.e., of the nature of the receipt, as noticed above, the Tribunal sustained the finding of fact returned by the CIT(A), who, in support of his conclusion noted the following: “…- the scheme was for promoting industrialization of notified backward districts; - it was applicable to SSI uni…

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

…n of the actual cost of acquisition of capital asset. It was held and observed as under:— ' In so far as question No.2 is concerned, this court finds that the same is squarely covered by the decision of the Supreme Court in CIT v. P. J. Chemicals Ltd., [1994] 210 ITR 830. In the said case, after review of the law on the point, the Supreme Court has held as under (head note): "Where Government subsidy is intended as an incentive to encourage entrepreneurs to move to backward areas and establish industries, the specified percentage of the fixed capital cost, which is the basis for determining the subsidy, being onl…

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

…n of the actual cost of acquisition of capital asset. It was held and observed as under:— ' In so far as question No.2 is concerned, this court finds that the same is squarely covered by the decision of the Supreme Court in CIT v. P. J. Chemicals Ltd., [1994] 210 ITR 830. In the said case, after review of the law on the point, the Supreme Court has held as under (head note): "Where Government subsidy is intended as an incentive to encourage entrepreneurs to move to backward areas and establish industries, the specified percentage of the fixed capital cost, which is the basis for determining the subsidy, being onl…

DCIT Cir. 6 (3), Mumbai vs. M/S. Grasim Industries Ltd., Mumbai

In the result, the appeal by the Revenue is dismissed

ITA 4337/MUM/2005[2004-2005]Status: DisposedITAT Mumbai23 Jun 2023AY 2004-2005

Bench: Shri Amarjit Singh & Shri Sandeep Singh Karhail

For Appellant: Shri J.D. Mistri a/wFor Respondent: Dr. Kishore Dhule
Section 142(1)Section 143(2)Section 143(3)Section 250Section 43BSection 80Section 80HSection 80I

…of its source, is to enable the assessee to acquire new plant and machinery for future expansion of its manufacturing capacity in a backward area, the entire subsidy must be held to be a capital receipt. Further the Supreme Court in the case of P J Chemicals (210 ITR 830) has held that the incentive granted at the prescribed percentage of fixed capital investment in backward districts was an incentive to encourage entrepreneurs to move to the backward areas was an incentive to encourage entrepreneurs to move to the backwards areas to establish industries and was not a payment to meet any portion of the actual cos…

M/S. Grasim Industries Ltd., Mumbai vs. DCIT CIT Cir. 6(3), Mumbai

In the result, the appeal by the Revenue is dismissed

ITA 3439/MUM/2005[2004-2005]Status: DisposedITAT Mumbai23 Jun 2023AY 2004-2005

Bench: Shri Amarjit Singh & Shri Sandeep Singh Karhail

For Appellant: Shri J.D. Mistri a/wFor Respondent: Dr. Kishore Dhule
Section 142(1)Section 143(2)Section 143(3)Section 250Section 43BSection 80Section 80HSection 80I

…of its source, is to enable the assessee to acquire new plant and machinery for future expansion of its manufacturing capacity in a backward area, the entire subsidy must be held to be a capital receipt. Further the Supreme Court in the case of P J Chemicals (210 ITR 830) has held that the incentive granted at the prescribed percentage of fixed capital investment in backward districts was an incentive to encourage entrepreneurs to move to the backward areas was an incentive to encourage entrepreneurs to move to the backwards areas to establish industries and was not a payment to meet any portion of the actual cos…

Sunbeam Auto Ltd., New Delhi vs. DCIT, New Delhi

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

ITA 235/DEL/2017[2013-14]Status: DisposedITAT Delhi06 Apr 2023AY 2013-14

Bench: Shri G.S. Pannu, Hon’Dble & Ms. Astha Chandraassessment Year: 2011-12 Sunbeam Auto Ltd. Vs. Addl. Cit, S-323, Panchsheel Park, Range-9, New Delhi 110 017 New Delhi. Pan Aabcs2948F (Appellant) (Respondent) Assessment Year: 2011-12 Addl. Cit Vs. Sunbeam Auto Ltd. Special Range-8, S-323, Panchsheel Park, Room No. 199A, New Delhi 110 017 C.R. Building, Pan Aabcs2948F New Delhi. (Appellant) (Respondent) Assessment Year: 2013-14 Sunbeam Auto Ltd. Vs. Dcit, S-323, Panchsheel Park, Circle-24(2) New Delhi 110 017 New Delhi. Pan Aabcs2948F (Appellant) (Respondent)

For Appellant: Ms. Shashi M Kapila, AdvocateFor Respondent: Shri Umesh Takyar, Sr. DR
Section 143(1)Section 143(3)Section 14ASection 264Section 37(1)Section 40Section 43(1)

…he subsidy is quantified on the basis of the fixed capital investment but that does not mean that the subsidy is given to purchase the assets. Placing reliance on several decisions including the decision of Hon’ble Supreme Court in CIT vs. P.J. Chemicals Ltd. 210 ITR 830 (SC) it was submitted that the subsidy received by the assessee from Haryana Govt. cannot be reduced from the actual cost of the assets for the purpose of computing the depreciation. The explanation was not acceptable to the Ld. AO who held that the capital subsidy was liable to be reduced from the cost of the assets in terms of Explanation 10 to…

Addl. CIT, New Delhi vs. M/S. Sunbeam Auto Pvt. Ltd., New Delhi

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

ITA 5127/DEL/2016[2011-12]Status: DisposedITAT Delhi06 Apr 2023AY 2011-12

Bench: Shri G.S. Pannu, Hon’Dble & Ms. Astha Chandraassessment Year: 2011-12 Sunbeam Auto Ltd. Vs. Addl. Cit, S-323, Panchsheel Park, Range-9, New Delhi 110 017 New Delhi. Pan Aabcs2948F (Appellant) (Respondent) Assessment Year: 2011-12 Addl. Cit Vs. Sunbeam Auto Ltd. Special Range-8, S-323, Panchsheel Park, Room No. 199A, New Delhi 110 017 C.R. Building, Pan Aabcs2948F New Delhi. (Appellant) (Respondent) Assessment Year: 2013-14 Sunbeam Auto Ltd. Vs. Dcit, S-323, Panchsheel Park, Circle-24(2) New Delhi 110 017 New Delhi. Pan Aabcs2948F (Appellant) (Respondent)

For Appellant: Ms. Shashi M Kapila, AdvocateFor Respondent: Shri Umesh Takyar, Sr. DR
Section 143(1)Section 143(3)Section 14ASection 264Section 37(1)Section 40Section 43(1)

…he subsidy is quantified on the basis of the fixed capital investment but that does not mean that the subsidy is given to purchase the assets. Placing reliance on several decisions including the decision of Hon’ble Supreme Court in CIT vs. P.J. Chemicals Ltd. 210 ITR 830 (SC) it was submitted that the subsidy received by the assessee from Haryana Govt. cannot be reduced from the actual cost of the assets for the purpose of computing the depreciation. The explanation was not acceptable to the Ld. AO who held that the capital subsidy was liable to be reduced from the cost of the assets in terms of Explanation 10 to…

Sunbeam Auto Ltd., New Delhi vs. Addl. CIT, New Delhi

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

ITA 4378/DEL/2016[2011-12]Status: DisposedITAT Delhi06 Apr 2023AY 2011-12

Bench: Shri G.S. Pannu, Hon’Dble & Ms. Astha Chandraassessment Year: 2011-12 Sunbeam Auto Ltd. Vs. Addl. Cit, S-323, Panchsheel Park, Range-9, New Delhi 110 017 New Delhi. Pan Aabcs2948F (Appellant) (Respondent) Assessment Year: 2011-12 Addl. Cit Vs. Sunbeam Auto Ltd. Special Range-8, S-323, Panchsheel Park, Room No. 199A, New Delhi 110 017 C.R. Building, Pan Aabcs2948F New Delhi. (Appellant) (Respondent) Assessment Year: 2013-14 Sunbeam Auto Ltd. Vs. Dcit, S-323, Panchsheel Park, Circle-24(2) New Delhi 110 017 New Delhi. Pan Aabcs2948F (Appellant) (Respondent)

For Appellant: Ms. Shashi M Kapila, AdvocateFor Respondent: Shri Umesh Takyar, Sr. DR
Section 143(1)Section 143(3)Section 14ASection 264Section 37(1)Section 40Section 43(1)

…he subsidy is quantified on the basis of the fixed capital investment but that does not mean that the subsidy is given to purchase the assets. Placing reliance on several decisions including the decision of Hon’ble Supreme Court in CIT vs. P.J. Chemicals Ltd. 210 ITR 830 (SC) it was submitted that the subsidy received by the assessee from Haryana Govt. cannot be reduced from the actual cost of the assets for the purpose of computing the depreciation. The explanation was not acceptable to the Ld. AO who held that the capital subsidy was liable to be reduced from the cost of the assets in terms of Explanation 10 to…

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

…as question No.2 is concerned, this court finds that the same is squarely covered by the decision of the Supreme 114 ITA NO.3137 & 3138/MUM/2019 (A.Y: 2010-11) ITA.No. 3177/MUM/2019 (A.Y. 2010-11) M/s. ACC Limited Court in CIT v. P. J. Chemicals Ltd., [1994] 210 ITR 830. In the said case, after review of the law on the point, the Supreme Court has held as under (head note): "Where Government subsidy is intended as an incentive to encourage entrepreneurs to move to backward areas and establish industries, the specified percentage of the fixed capital cost, which is the basis for determining the subsidy, being onl…

Acc Ltd., Mumbai vs. Addl CIT(Ltu), Mumbai

In the result, appeal filed by assessee is partly allowed

ITA 3137/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

…as question No.2 is concerned, this court finds that the same is squarely covered by the decision of the Supreme 114 ITA NO.3137 & 3138/MUM/2019 (A.Y: 2010-11) ITA.No. 3177/MUM/2019 (A.Y. 2010-11) M/s. ACC Limited Court in CIT v. P. J. Chemicals Ltd., [1994] 210 ITR 830. In the said case, after review of the law on the point, the Supreme Court has held as under (head note): "Where Government subsidy is intended as an incentive to encourage entrepreneurs to move to backward areas and establish industries, the specified percentage of the fixed capital cost, which is the basis for determining the subsidy, being onl…

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

In the result, appeal filed by assessee is partly allowed

ITA 3246/MUM/2018[2012-13]Status: DisposedITAT Mumbai28 Feb 2023AY 2012-13

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Sandeep Singh Karhail, Hon'Blem/S. Acc Ltd., V. Dcit – Range – 1(1) Mumbai {Formerly Known As The Associated Cement Companies, Ltd.,} Cement House, 121 M.K. Road, Churchgate Mumbai - 400020 Pan: Aaact1507C (Appellant) (Respondent) Dcit (Ltu)-1 V. M/S. Acc Ltd., 29Th Floor, Centre No.1 Cement House, 121 World Trade Centre, Cuffe Parade M.K. Road, Churchgate Mumbai - 400005 Mumbai - 400020 Pan: Aaact1507C (Appellant) (Respondent)

Section 143(3)Section 14A

…n of the actual cost of acquisition of capital asset. It was held and observed as under:— ' In so far as question No.2 is concerned, this court finds that the same is squarely covered by the decision of the Supreme Court in CIT v. P. J. Chemicals Ltd., [1994] 210 ITR 830. In the said case, after review of the law on the point, the Supreme Court has held as under (head note): "Where Government subsidy is intended as an incentive to encourage entrepreneurs to move to backward areas and establish industries, the specified percentage of the fixed capital cost, which is the basis for determining the subsidy, being onl…

Acc Limited (Formerly Known As the Associated Cement Companies Ltd.), Mumbai vs. Addll. CIT, RG. 1(1), Mumbai

In the result, appeal filed by assessee is partly allowed

ITA 3203/MUM/2018[2012-13]Status: DisposedITAT Mumbai28 Feb 2023AY 2012-13

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Sandeep Singh Karhail, Hon'Blem/S. Acc Ltd., V. Dcit – Range – 1(1) Mumbai {Formerly Known As The Associated Cement Companies, Ltd.,} Cement House, 121 M.K. Road, Churchgate Mumbai - 400020 Pan: Aaact1507C (Appellant) (Respondent) Dcit (Ltu)-1 V. M/S. Acc Ltd., 29Th Floor, Centre No.1 Cement House, 121 World Trade Centre, Cuffe Parade M.K. Road, Churchgate Mumbai - 400005 Mumbai - 400020 Pan: Aaact1507C (Appellant) (Respondent)

Section 143(3)Section 14A

…n of the actual cost of acquisition of capital asset. It was held and observed as under:— ' In so far as question No.2 is concerned, this court finds that the same is squarely covered by the decision of the Supreme Court in CIT v. P. J. Chemicals Ltd., [1994] 210 ITR 830. In the said case, after review of the law on the point, the Supreme Court has held as under (head note): "Where Government subsidy is intended as an incentive to encourage entrepreneurs to move to backward areas and establish industries, the specified percentage of the fixed capital cost, which is the basis for determining the subsidy, being onl…

Acc Ltd, Mumbai vs. Asst CIT Ltu, Mumbai

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

ITA 6082/MUM/2014[2007-08]Status: DisposedITAT Mumbai28 Feb 2023AY 2007-08

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

Section 143(3)Section 145A

…n of the actual cost of acquisition of capital asset. It was held and observed as under:— ' In so far as question No.2 is concerned, this court finds that the same is squarely covered by the decision of the Supreme Court in CIT v. P. J. Chemicals Ltd., [1994] 210 ITR 830. In the said case, after review of the law on the point, the Supreme Court has held as under (head note): "Where Government subsidy is intended as an incentive to encourage entrepreneurs to move to backward areas and establish industries, the specified percentage of the fixed capital cost, which is the basis for determining the subsidy, being onl…

Acc Limited (Formerly Known As the Associated Cement Companies Ltd.), Mumbai vs. ACIT - Ltu, Mumbai

ITA 417/MUM/2014[2006-07]Status: DisposedITAT Mumbai28 Feb 2023AY 2006-07

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Sandeep Singh Karhail, Hon'Blem/S. Acc Limited V. Addl. Cit -Range 1(1) (Formerly Known As The Associated Cement Mumbai Companies Ltd.) Cement House, 121, M.K. Road Churchgate, Mumbai-400020 Pan: Aaact1507C (Appellant) (Respondent) M/S. Acc Limited V. Asst. Cit-Ltu (Formerly Known As The Associated Mumbai Cement Companies Ltd.) Cement House, 121, M.K. Road Churchgate, Mumbai-400020 Pan: Aaact1507C (Appellant) (Respondent) Acit – Ltu V. M/S. Acc Limited 28Th Floor, Centre-1 (Formerly Known As The Associated Cement Companies Ltd.) World Trade Centre, Cuffe Parade Cement House, 121, M.K. Road Mumbai - 400005 Churchgate, Mumbai-400020 Pan: Aaact1507C (Appellant) (Respondent)

Section 143(3)Section 145ASection 251Section 44A

…d of the actual cost of acquisition of capital asset. It was held and observed as under:— ' In so far as question No.2 is concerned, this court finds that the same is squarely covered by the decision of the Supreme Court in CIT v. P. J. Chemicals Ltd., [1994] 210 ITR 830. In the said case, after review of the law on the point, the Supreme Court has held as under (head note): "Where Government subsidy is intended as an incentive to encourage entrepreneurs to move to backward areas and establish industries, the specified percentage of the fixed capital cost, which is the basis for determining the subsidy, being onl…

Acc Ltd ( Formerly Known As the Associates Cement Companies Ltd), Mumbai vs. Addl CIT Ltu, Mumbai

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

ITA 4669/MUM/2012[2007-08]Status: DisposedITAT Mumbai28 Feb 2023AY 2007-08

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

Section 143(3)Section 145A

…n of the actual cost of acquisition of capital asset. It was held and observed as under:— ' In so far as question No.2 is concerned, this court finds that the same is squarely covered by the decision of the Supreme Court in CIT v. P. J. Chemicals Ltd., [1994] 210 ITR 830. In the said case, after review of the law on the point, the Supreme Court has held as under (head note): "Where Government subsidy is intended as an incentive to encourage entrepreneurs to move to backward areas and establish industries, the specified percentage of the fixed capital cost, which is the basis for determining the subsidy, being onl…

Addl.C.I.T. Ltu, Mumbai vs. Acc Ltd., Mumbai

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

ITA 4556/MUM/2012[2007-08]Status: DisposedITAT Mumbai28 Feb 2023AY 2007-08

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

Section 143(3)Section 145A

…n of the actual cost of acquisition of capital asset. It was held and observed as under:— ' In so far as question No.2 is concerned, this court finds that the same is squarely covered by the decision of the Supreme Court in CIT v. P. J. Chemicals Ltd., [1994] 210 ITR 830. In the said case, after review of the law on the point, the Supreme Court has held as under (head note): "Where Government subsidy is intended as an incentive to encourage entrepreneurs to move to backward areas and establish industries, the specified percentage of the fixed capital cost, which is the basis for determining the subsidy, being onl…

Addl CIT RG 1(1), Mumbai vs. Acc Ltd, Mumbai

ITA 5692/MUM/2011[2006-07]Status: DisposedITAT Mumbai28 Feb 2023AY 2006-07

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Sandeep Singh Karhail, Hon'Blem/S. Acc Limited V. Addl. Cit -Range 1(1) (Formerly Known As The Associated Cement Mumbai Companies Ltd.) Cement House, 121, M.K. Road Churchgate, Mumbai-400020 Pan: Aaact1507C (Appellant) (Respondent) M/S. Acc Limited V. Asst. Cit-Ltu (Formerly Known As The Associated Mumbai Cement Companies Ltd.) Cement House, 121, M.K. Road Churchgate, Mumbai-400020 Pan: Aaact1507C (Appellant) (Respondent) Acit – Ltu V. M/S. Acc Limited 28Th Floor, Centre-1 (Formerly Known As The Associated Cement Companies Ltd.) World Trade Centre, Cuffe Parade Cement House, 121, M.K. Road Mumbai - 400005 Churchgate, Mumbai-400020 Pan: Aaact1507C (Appellant) (Respondent)

Section 143(3)Section 145ASection 251Section 44A

…d of the actual cost of acquisition of capital asset. It was held and observed as under:— ' In so far as question No.2 is concerned, this court finds that the same is squarely covered by the decision of the Supreme Court in CIT v. P. J. Chemicals Ltd., [1994] 210 ITR 830. In the said case, after review of the law on the point, the Supreme Court has held as under (head note): "Where Government subsidy is intended as an incentive to encourage entrepreneurs to move to backward areas and establish industries, the specified percentage of the fixed capital cost, which is the basis for determining the subsidy, being onl…

Acc Ltd ( Formerly Known As the Associated Cement Companies Ltd), Mumbai vs. Addl CIT RG 1(1), Mumbai

ITA 5655/MUM/2011[2006-07]Status: DisposedITAT Mumbai28 Feb 2023AY 2006-07

Bench: Shri S. Rifaur Rahman, Hon'Ble & Shri Sandeep Singh Karhail, Hon'Blem/S. Acc Limited V. Addl. Cit -Range 1(1) (Formerly Known As The Associated Cement Mumbai Companies Ltd.) Cement House, 121, M.K. Road Churchgate, Mumbai-400020 Pan: Aaact1507C (Appellant) (Respondent) M/S. Acc Limited V. Asst. Cit-Ltu (Formerly Known As The Associated Mumbai Cement Companies Ltd.) Cement House, 121, M.K. Road Churchgate, Mumbai-400020 Pan: Aaact1507C (Appellant) (Respondent) Acit – Ltu V. M/S. Acc Limited 28Th Floor, Centre-1 (Formerly Known As The Associated Cement Companies Ltd.) World Trade Centre, Cuffe Parade Cement House, 121, M.K. Road Mumbai - 400005 Churchgate, Mumbai-400020 Pan: Aaact1507C (Appellant) (Respondent)

Section 143(3)Section 145ASection 251Section 44A

…d of the actual cost of acquisition of capital asset. It was held and observed as under:— ' In so far as question No.2 is concerned, this court finds that the same is squarely covered by the decision of the Supreme Court in CIT v. P. J. Chemicals Ltd., [1994] 210 ITR 830. In the said case, after review of the law on the point, the Supreme Court has held as under (head note): "Where Government subsidy is intended as an incentive to encourage entrepreneurs to move to backward areas and establish industries, the specified percentage of the fixed capital cost, which is the basis for determining the subsidy, being onl…

D.C.I.T., CC - 4(4), Kolkata vs. Electrosteel Casting Ltd., Kolkata

In the result, the appeal of the revenue is dismissed

ITA 485/KOL/2022[2016-2017]Status: DisposedITAT Kolkata29 Dec 2022AY 2016-2017

Bench: Shri Rajpal Yadav, Vice- & Shri Girish Agrawalassessment Years: 2016-17 Deputy Commissioner Of M/S. Electrosteel Casting Ltd. Income-Tax, Central G.K. Tower Vs. Circle-4(4), Kolkata. 19, Camac Street Kolkata -700017 (Pan: Aaace4975B) (Appellant) (Respondent)

Section 143(3)Section 14ASection 43(1)

…n of fixed assets only. Under the given circumstances, the amount of subsidy, is not deductible from the actual of the cost under section 43(1)read with Explanation 10 of the Act. 68. The Hon'ble Supreme Court in the case of CIT v. P. J. Chemicals Ltd. [1994] 210 ITR 830 (SC) has held that the expression "actual cost" needs to be interpreted liberally. The subsidy of the nature we are concerned with, does not partake of the incidents which attract the conditions for their deductibility from "actual cost". The Government subsidy,it is not unreasonable to say, is an incentive not for the specific purpose of meeting…