CIT v. Ponni Sugars & Chemicals Ltd.

306 ITR 392Supreme Court of India2008#107 most cited

What is CIT v. Ponni Sugars & Chemicals Ltd. authority for?

The "Purpose Test" determines whether an incentive or subsidy is a capital or revenue receipt for income tax purposes. If the incentive's purpose is to enable an assessee to set up a new industry or make investments in capital assets, it is a capital receipt and not taxable.

577

judgments rely on this decision, according to BharatTax’s citation analysis of 367,154 Indian tax judgments — from 2007 to 2026.

Also referred to as

CIT v. Ponni Sugars & Chemicals Ltd. · 306 ITR 392 · capital receipt vs revenue receipt · subsidy taxability · incentive scheme purpose test · sales tax incentive capital receipt · excise duty exemption capital receipt · section 2(24)(xviii) · section 43(1) · investment incentive taxability · purpose test subsidy · nature of receipt

Also reported as

174 Taxmann 87219 CTR 105

Sections most often in play

Section 115JBSection 143(3)Section 14ASection 2(24)(xviii)Section 37(1)Section 80P(2)(d)Section 80P(4)Section 43(1)
Read the full judgment

Issues it is cited on

section 2(24)(xviii)section 43(1)initial assessment yearsection 80hhcsection 80hhsection 2(24)additional depreciationbook profitswritten down valueblock of assetssection 32(1)liable to tax

Judgments citing CIT v. Ponni Sugars & Chemicals Ltd.

Srf Limited, New Delhi vs. DCIT, Circle- 1, Ltu, New Delhi

In the result, the appeal being ITA No

ITA 4539/DEL/2017[2013-14]Status: DisposedITAT Delhi12 Dec 2025AY 2013-14

Bench: Shris.Rifaur Rahman & Shri Sudhir Pareek

For Appellant: Shri Pradeep Dinodia, CAFor Respondent: Shri S.K. Jadhav, CIT DR
Section 10ASection 143(3)Section 144C(5)Section 14ASection 92BSection 92C

…IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES ‘H’: NEW DELHI. BEFORE SHRIS.RIFAUR RAHMAN, ACCOUNTANT MEMBER and SHRI SUDHIR PAREEK, JUDICIAL MEMBER ITA No.4539/Del/2017 (Assessment Year: 2013-14) SRF Limited, vs. ACIT, Circle 1, C – 8, Commercial Complex, LTU, New Delhi. Safdarjang Development Area, New Delhi – 110 016. (PAN : AAACS0206P) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Pradeep Dinodia, CA Shri Ravi Kumar, CAR Shri Shubham, CA REVENUE BY : Shri S.K. Jadhav, CIT DR Date of Hearing : 15.10.2025 Date of Order : 12.12.2025 O R D E R PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER : 1. These appeals are fi…

Srf Ltd., New Delhi vs. ACIT, New Delhi

In the result, the appeal being ITA No

ITA 80/DEL/2016[2011-12]Status: DisposedITAT Delhi12 Dec 2025AY 2011-12

Bench: Shris.Rifaur Rahman & Shri Sudhir Pareek

For Appellant: Shri Pradeep Dinodia, CAFor Respondent: Shri S.K. Jadhav, CIT DR
Section 10ASection 143(3)Section 144C(5)Section 14ASection 92BSection 92C

…IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES ‘H’: NEW DELHI. BEFORE SHRIS.RIFAUR RAHMAN, ACCOUNTANT MEMBER and SHRI SUDHIR PAREEK, JUDICIAL MEMBER ITA No.4539/Del/2017 (Assessment Year: 2013-14) SRF Limited, vs. ACIT, Circle 1, C – 8, Commercial Complex, LTU, New Delhi. Safdarjang Development Area, New Delhi – 110 016. (PAN : AAACS0206P) (APPELLANT) (RESPONDENT) ASSESSEE BY : Shri Pradeep Dinodia, CA Shri Ravi Kumar, CAR Shri Shubham, CA REVENUE BY : Shri S.K. Jadhav, CIT DR Date of Hearing : 15.10.2025 Date of Order : 12.12.2025 O R D E R PER S. RIFAUR RAHMAN, ACCOUNTANT MEMBER : 1. These appeals are fi…

Balaji Powertronics, New Delhi vs. DCIT, Circle- 43(1), New Delhi

In the result, the appeal filed by the assessee is partly allowed for statistical purposes

ITA 2743/DEL/2022[2017-18]Status: DisposedITAT Delhi02 Dec 2025AY 2017-18

Bench: Shri M Balaganesh & Shri Vimal Kumarassessment Year: 2017-18 M/S. Balaji Powertronics, Vs. Dcit, Circle-43(1), H-56, Udyog Nagar, New Delhi Main Rohtak Road, Delhi – 1100 41 Pan :Aagfb0501M (Appellant) (Respondent)

Section 142(1)Section 143(2)Section 143(3)Section 144BSection 144CSection 144C(13)Section 144C(5)Section 270ASection 80Section 928A

…ve industrialization in the backward areas of Himachal Pradesh/Uttaranchal and to generate employment opportunities. 2.3 Reliance in this regard is placed on the decision of the Hon'ble Supreme Court in the case of the CIT Vs. Ponni Sugars and Chemicals Ltd. (306 ITR 392) wherein it was held that purpose test' i.e. the purpose for which subsidy was given should be applied to determine the receipt and the modality or the source of funds through or from which subsidy was given should not be decisive factor determining whether the subsidy was revenue or capital in nature. The principle for deciding the nature of sub…

Uttar Pradesh Water Supply and Sanitation Mission, Lucknow vs. ACIT(Exemption) Circle, Lucknow

In the result, both appeals are partly allowed

ITA 360/LKW/2024[2017-18]Status: DisposedITAT Lucknow28 Nov 2025AY 2017-18

Bench: Shri Kul Bharat & Shri Anadee Nath Misshra

Section 11(1)(a)Section 124(3)Section 143Section 143(2)

…e allowed on the cost of the Asset that is not met by the Assessee. the impact of the aforesaid amendment would be that principle laid down by the Apex Court in Sahney Steel & Press Works Ltd. (1997) 228 ITR 253 (SC) and Ponni Sugars and Chemicals Ltd. (2008) 306 ITR 392 (SC) laving down the 'purpose test' to classify it as capital or revenue receipt, shall no more hold good for subsidies received on or after 01.04.2015 6. 9. Further, the Income Computation and Disclosure Standards (ICDS) as well as amendments made to Section 145B(3) also align with the amendments made to Section 2(24)(xviii) of the Act since Se…

Deputy Commissioner of Income Tax (Exemptions) Lucknow, Lucknow vs. Uttar Pradesh Water Supply and Sanitation Mission, Lucknow

In the result, both appeals are partly allowed

ITA 288/LKW/2024[2017]Status: DisposedITAT Lucknow28 Nov 2025

Bench: Shri Kul Bharat & Shri Anadee Nath Misshra

Section 11(1)(a)Section 124(3)Section 143Section 143(2)

…e allowed on the cost of the Asset that is not met by the Assessee. the impact of the aforesaid amendment would be that principle laid down by the Apex Court in Sahney Steel & Press Works Ltd. (1997) 228 ITR 253 (SC) and Ponni Sugars and Chemicals Ltd. (2008) 306 ITR 392 (SC) laying down the 'purpose test' to classify it as capital or revenue receipt, shall no more hold good for subsidies received on or after 01.04.2015 6. 9. Further, the Income Computation and Disclosure Standards (ICDS) as well as amendments made to Section 145B(3) also align with the amendments made to Section 2(24)(xviii) of the Act since S…

Deputy Commissioner of Income Tax, Tirupur vs. Loocust Incorp, Tirupur

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

ITA 1426/CHNY/2025[2016]Status: DisposedITAT Chennai26 Nov 2025

Bench: Shri George George K & Shri Jagadish

For Appellant: Ms. Mythili, JCITFor Respondent: Shri T. Banusekar, Advocate
Section 143(2)Section 143(3)Section 2(24)(xviii)Section 250

…24 ACIT Vs Eastman exports AY 17- 18/18-19 order date 20/9/2024 wherein at para 17 onwards Hon'ble tribunal has taken above view with above mentioned logic and following Hon'ble Supreme Court decision in the case CIT v. Ponni Sugars & Chemicals Limited [2008] 306 ITR 392.” 5. Aggrieved by the order of the FAA, the Revenue has filed the present appeal before the Tribunal. The Ld.DR relied on the grounds. 6. The Ld.AR on the other hand submitted that the issue in question is squarely covered in favour of the assessee by the order of the Chennai Bench of the Tribunal in the case of Eastman Exports Global Clothing…

Deputy Commissioner of Income Tax, Central Circle 3(3), Mumbai vs. Welspun Living Limited, Mumbai

In the result, the appeal by the Revenue for the assessment year 2015-

ITA 3697/MUM/2025[2015-16]Status: DisposedITAT Mumbai27 Oct 2025AY 2015-16

Bench: Shri Sandeep Singh Karhailshri Prabhash Shankar

For Appellant: Shri Harsh KapadiaFor Respondent: Shri Arun Kanti Datta, CIT-DR
Section 115Section 14ASection 250

…eived was for the purpose of acquiring a capital asset? 4. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in ignoring the Supreme Court decision in the case of CIT Vs. Ponni Sugars & Chemicals us. CIT (2008) 174306 ITR 392 Taxman 87 (SC) wherein it is held that the character of the receipt of a subsidy in the hands of the assessee under a scheme has to be determined with respect to the purpose for which the subsidy is granted? 5. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) is justified in directing the Assessing Officer to d…

Deputy Commissioner of Income Tax, Central Circle 3(3), Mumbai vs. Welspun Living Limited, Mumbai

In the result, the appeal by the Revenue for the assessment year 2015-

ITA 3696/MUM/2025[2013-14]Status: DisposedITAT Mumbai27 Oct 2025AY 2013-14

Bench: Shri Sandeep Singh Karhailshri Prabhash Shankar

For Appellant: Shri Harsh KapadiaFor Respondent: Shri Arun Kanti Datta, CIT-DR
Section 115Section 14ASection 250

…eived was for the purpose of acquiring a capital asset? 4. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in ignoring the Supreme Court decision in the case of CIT Vs. Ponni Sugars & Chemicals us. CIT (2008) 174306 ITR 392 Taxman 87 (SC) wherein it is held that the character of the receipt of a subsidy in the hands of the assessee under a scheme has to be determined with respect to the purpose for which the subsidy is granted? 5. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) is justified in directing the Assessing Officer to d…

DCIT Central Circle-31 Delhi, Delhi vs. Rswm Ltd., Bhilwara

In the result, the revenue appeals are dismissed

ITA 909/JODH/2024[2013]Status: DisposedITAT Jodhpur29 Sept 2025

Bench: IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE DR. MITHA LAL MEENA, HON'BLE ACCOUNTANT MEMBER AND ANIKESH BANERJEE, HON'BLE (Judicial Member)

Section 139(5)

…of the case and in law, the Ld. CIT (A) erred in relying upon the decision of DCIT Circle-9(1), New Delhi vs. Sutlej Textile and Ind. Pvt. Ltd. ITA 5142/DeV2013 which was based upon the Supreme Court decision in the case of M/s. Ponni Sugar and Chemicals Ltd. 306 ITR 392 whereas the facts of the DCIT Circle-9(1), New Delhi vs Sutlej textile and Ind. Pvt. Ltd. are not identical to the facts and circumstances of the instant case. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing the assessee's Claim that interest subsidy receipts were capital receipts ignoring the fac…

DCIT Central Circle-31 New Delhi, New Delhi vs. Rswm Ltd., Bhilwara

In the result, the revenue appeals are dismissed

ITA 908/JODH/2024[2012-13]Status: DisposedITAT Jodhpur29 Sept 2025AY 2012-13

Bench: Dr. Mitha Lal Meena, Hon'Ble & Anikesh Banerjee, Hon'Ble

Section 139(5)

…of the case and in law, the Ld. CIT (A) erred in relying upon the decision of DCIT Circle-9(1), New Delhi vs. Sutlej Textile and Ind. Pvt. Ltd. ITA 5142/DeV2013 which was based upon the Supreme Court decision in the case of M/s. Ponni Sugar and Chemicals Ltd. 306 ITR 392 whereas the facts of the DCIT Circle-9(1), New Delhi vs Sutlej textile and Ind. Pvt. Ltd. are not identical to the facts and circumstances of the instant case. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing the assessee's Claim that interest subsidy receipts were capital receipts ignoring the fac…

DCIT Central Circle-31 Delhi, New Delhi vs. Rswm Ltd., Bhilwara

In the result, the revenue appeals are dismissed

ITA 907/JODH/2024[2011]Status: DisposedITAT Jodhpur29 Sept 2025

Bench: Dr. Mitha Lal Meena, Hon'Ble & Anikesh Banerjee, Hon'Ble

Section 139(5)

…of the case and in law, the Ld. CIT (A) erred in relying upon the decision of DCIT Circle-9(1), New Delhi vs. Sutlej Textile and Ind. Pvt. Ltd. ITA 5142/DeV2013 which was based upon the Supreme Court decision in the case of M/s. Ponni Sugar and Chemicals Ltd. 306 ITR 392 whereas the facts of the DCIT Circle-9(1), New Delhi vs Sutlej textile and Ind. Pvt. Ltd. are not identical to the facts and circumstances of the instant case. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing the assessee's Claim that interest subsidy receipts were capital receipts ignoring the fac…

DCIT Central Circle-31 Delhi, Delhi vs. Rswm Ltd., Bhilwara

In the result, the revenue appeals are dismissed

ITA 906/JODH/2024[2009-10]Status: DisposedITAT Jodhpur29 Sept 2025AY 2009-10

Bench: Dr. Mitha Lal Meena, Hon'Ble & Anikesh Banerjee, Hon'Ble

Section 139(5)

…of the case and in law, the Ld. CIT (A) erred in relying upon the decision of DCIT Circle-9(1), New Delhi vs. Sutlej Textile and Ind. Pvt. Ltd. ITA 5142/DeV2013 which was based upon the Supreme Court decision in the case of M/s. Ponni Sugar and Chemicals Ltd. 306 ITR 392 whereas the facts of the DCIT Circle-9(1), New Delhi vs Sutlej textile and Ind. Pvt. Ltd. are not identical to the facts and circumstances of the instant case. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing the assessee's Claim that interest subsidy receipts were capital receipts ignoring the fac…

DCIT Central Circle 3(2), Mumbai, Air India vs. Aarti Industries Limited, Mumbai

In the result, the appeal is dismissed

ITA 4869/MUM/2023[2015-2016]Status: DisposedITAT Mumbai25 Sept 2025AY 2015-2016

Bench: Shri Saktijit Dey & Shri Girish Agrawaldy. Cit, Central Circle-3(2) Aarti Industries Limited R. No. 1913, 19Th Floor, 71, Udyog Kshetra, 2Nd Floor, Air India Building, Nariman Point, Vs. Mulund Goregaon Link Road, Mumbai-400 021 Mulund (W), Mumbai-400 080 Pan/Gir No. Aabca 2787 L (Appellant) : (Respondent) Appellant By : Shri Vijay Mehta Respondent By : Shri Rajesh Kumar Yadav Date Of Hearing : 12.08.2025 Date Of Pronouncement : 25.09.2025 O R D E R Per Saktijit Dey: This Is An Appeal By The Revenue, Against The Order Dated 30.10.2023 Of Learned Commissioner Of Income Tax (Appeals), Mumbai (‘Ld.Cit(A) For Short), Pertaining To The Assessment Year (A.Y.) 2015-16. 2. Ground No. 1 In The Appeal Reads As Under: 1. On The Facts & Circumstances Of The Case, The Ld. Cit(A) Erred In Deleting The Disallowances Made By The A.O. To Restrict The Deduction U/S. 80Ia Of The Act Despite The Fact That The Issue Has Not Attained Finality & Pending For Adjudication Before The Hon'Ble Supreme Court? – Rs.396,81,798/- 3. Briefly The Facts Are, The Assessee Is A Resident Corporate Entity Engaged In Manufacturing & Sale Of Chemicals, Fertilizers & Intermediaries. For Such Manufacturing Activity, The Assessee Has Set Up A Plant At Plot No. 801/23, Gidc, Phase-Iii

For Appellant: Shri Vijay MehtaFor Respondent: Shri Rajesh Kumar Yadav
Section 133(6)Section 80I

…employment generation by the company connected to the export of goods and mercantile. It is linked with capital in nature. The CIT(A)has placed reliance upon the decision of the Hon'ble Supreme Court in the case of CIT VS. Ponni Sugars& Chemicals Ltd. (2008) 306 ITR 392 (SC), Eastman Exports Global Clothing Pvt. Ltd. in ITA.No.47/MDS/2016 dated 17.05.2016 and Sutlej Textiles & Industries Ltd. (ITA. No. 5142/Del/2013) and M/s. Gloster Jute Mills Ltd. Vs. Addl. CIT in ITA.No. 687/Kol/2010. These issues have duly been examined and discussed by CIT(A) in his order. The copy of scheme has also been filed by Id. Repre…

DCIT Cen Cir 1(4), Mumbai vs. Grasim Industries Ltd, Mumbai

In the result, appeal of the revenue and the assessee are partly allowed, and the additional ground of the assessee is dismissed

ITA 4069/MUM/2016[2010-11]Status: DisposedITAT Mumbai09 Sept 2025AY 2010-11

Bench: Shri Narendra Kumar Billaiya & Shri Anikesh Banerjee

For Appellant: Shri J.D. Mistry – Sr. Advocate &For Respondent: Shri Arun Kanti Datta - CIT DR
Section 143(3)Section 250Section 260ASection 43BSection 45Section 801ASection 801A(4)

…. In any case, the assessee submits that it has been settled by various judicial pronouncements, including the decision of the Hon’ble Supreme Court in Sahney Steel and Press Works Ltd. and Ors. V CIT (228 ITR 253) (SC), CIT Vs. Ponni Sugars & Chemicals Ltd. (306 ITR 392) (SC), the form of mechanism through which subsidy is given is irrelevant; the crucial determining factor is the purpose for which the subsidy is given. The purpose of the subsidy under which the assessee has been granted an incentive is accepted to be for rapid industrialisation and to encourage a balanced growth of industries in the State of Gu…

Grasim Industries Limited, Mumbai vs. DCIT, CC-1(4), Mumbai

In the result, appeal of the revenue and the assessee are partly allowed,

ITA 2897/MUM/2016[2010-11]Status: DisposedITAT Mumbai09 Sept 2025AY 2010-11

Bench: Shri Narendra Kumar Billaiya & Shri Anikesh Banerjee

For Appellant: Shri J.D. Mistry – Sr. Advocate &For Respondent: Shri Arun Kanti Datta - CIT DR
Section 143(3)Section 250Section 260ASection 43BSection 45Section 801ASection 801A(4)

…. In any case, the assessee submits that it has been settled by various judicial pronouncements, including the decision of the Hon'ble Supreme Court in Sahney Steel and Press Works Ltd. and Ors. V CIT (228 ITR 253) (SC), CIT Vs. Ponni Sugars & Chemicals Ltd. (306 ITR 392) (SC), the form of mechanism through which subsidy is given is irrelevant; the crucial determining factor is the purpose for which the subsidy is given. The purpose of the subsidy under which the assessee has been granted an incentive is accepted to be for rapid industrialisation and to encourage a balanced growth of industries in the State of Gu…

Ganesh Polychem Limited, Mumbai vs. DCIT, CC-3(2), Mumbai

The appeal of the assessee is allowed for statistical purposes

ITA 2145/MUM/2025[2017-18]Status: DisposedITAT Mumbai05 Sept 2025AY 2017-18

Bench: Shri Saktijit Dey & Ms Padmavathy S, Am

For Appellant: Shri Sanjay Parekh, ARFor Respondent: Shri Arun Kanti Datta, CIT-DR
Section 115JSection 132Section 139(1)Section 153ASection 250

…of the assessee had to be determined with respect to the purpose for which subsidy is given by applying the purpose test, as held in Sahney Steel & Press Works Ltd. itself and reiterated in later judgment in CIT v. Ponni Sugars & Chemicals Ltd. & Ors. (2008) 306 ITR 392, referred to in the impugned order of the Tribunal." 6. This Court notices that the Punjab and Haryana High Court took into account the previous binding ruling of the Supreme Court in CIT v. Ponni Sugars & Chemicals Ltd. [2008] 174 Taxman 87/306 ITR 392 and Sahney Steel & Press Works Ltd. v. CIT [1997] 94 Taxman 368/228 ITR 253. In these circumst…

Pr. Commissioner of Income Tax, Noida vs. Triveni Engineering and Industries Ltd

ITA/303/2025HC Delhi03 Sept 2025

Bench: Hon ’Ble Supreme Court? Iii. Whether On The Facts & Circumstances Of The Case, The Ld.

Section 260A

…ves receivable under the sugar industrial promotion policy, 2004 is in the nature of a capita! receipt going by the “purpose test” in light of Sahney Steel and Press Works Ltd. & Others v. CIT (1997) 228 ITR 253 (SC); CIT v. Pony Sugar & Chemicals Ltd. (2008) 306 ITR 392 (SC); & CIT v. Chaphalkar Brothers (2018) 400 ITR 279 (SC). 6. Learned CIT(DR) on the other hand, strongly supports, the1"'assessment findings that the impugned subsidy in fact deserves to be treated as, a revenue receipt on “accrual” basis and, therefore, we ought to revive the entire addition of Rs.1,10,90,94,770/-. 7. Faced with this situation…

The Acti, Circle-3(1)(1), Ahmedabad vs. Nirma Limited, Ahmedabad

ITA 1437/AHD/2019[2016-17]Status: DisposedITAT Ahmedabad28 Aug 2025AY 2016-17

Bench: Shri Sanjay Garg & Shri Makarand V. Mahadeokarआयकर अपील सं/Ita Nos.1412 & 1413/Ahd/2019 निर्धारण वर्ष / Assessment Years: (2015-2016 & 2016-17) Nirma Limited, Nirma House, Ashram Road, Ahmedabad-380009. (Gujarat) बनाम / V/S. The Deputy Commissioner Of Income Tax, Circle 3(1)(1), Ahmedabad. स्थायी लेखा सं./Pan : Aaacn5350K आयकर अपील सं/Ita Nos.1436-1437/Ahd/2019 निर्धारण वर्ष / Assessment Years : (2015-16 & 2016-17) The Assistant Commissioner Of Income Tax, Circle 3(1)(1), Ahmedabad. Nirma Limited, बनाम / V/S. Nirma House, Ashram Road, Ahmedabad-380009. (Gujarat) स्थायी लेखा सं./ Pan: Aaacn5350K & C.O Nos.11-12/Ahd/2020 In आयकर अपील सं/Ita Nos.1436-1437/Ahd/2019 निर्धारण वर्ष / Assessment Years : (2015-16 & 2016-17) Nirma Limited, Nirma House, Ashram Road, Ahmedabad-380009. (Gujarat) The Deputy Commissioner Of बनाम/ V/S. Income Tax/The Assistant Commissioner Of Income Tax, Circle 3(1)(1), Ahmedabad. स्थायी लेखा सं./ Pan: Aaacn5350K अपीलार्थी/ (Appellant) प्रत्यर्थी / (Respondent)

For Appellant: Shri Bandish Soparkar, withFor Respondent: Shri Alpesh Parmar, CIT-DR
Section 115JSection 143(3)Section 14A

…heme under which the assessee received sales tax subsidy was a Backward Area Development Scheme of the Government of Gujarat, aimed at encouraging setting up of industries in backward regions. The Hon'ble Supreme Court in CIT v. Ponni Sugars & Chemicals Ltd. (306 ITR 392) has laid down the purpose test to determine the character of subsidy. If the object of subsidy is to promote capital investment, the receipt is capital in nature, irrespective of the form or manner of quantification. Conversely, if the object is to supplement trade receipts, it would be revenue. ITA Nos.1412-1413/Ahd/2019 with others Nirma Limit…

The Acti, Circle-3(1)(1), Ahmedabad vs. Nirma Limited, Ahmedabad

ITA 1436/AHD/2019[2015-16]Status: DisposedITAT Ahmedabad28 Aug 2025AY 2015-16

Bench: Shri Sanjay Garg & Shri Makarand V. Mahadeokarआयकर अपील सं/Ita Nos.1412 & 1413/Ahd/2019 निर्धारण वर्ष / Assessment Years: (2015-2016 & 2016-17) Nirma Limited, Nirma House, Ashram Road, Ahmedabad-380009. (Gujarat) बनाम / V/S. The Deputy Commissioner Of Income Tax, Circle 3(1)(1), Ahmedabad. स्थायी लेखा सं./Pan : Aaacn5350K आयकर अपील सं/Ita Nos.1436-1437/Ahd/2019 निर्धारण वर्ष / Assessment Years : (2015-16 & 2016-17) The Assistant Commissioner Of Income Tax, Circle 3(1)(1), Ahmedabad. Nirma Limited, बनाम / V/S. Nirma House, Ashram Road, Ahmedabad-380009. (Gujarat) स्थायी लेखा सं./ Pan: Aaacn5350K & C.O Nos.11-12/Ahd/2020 In आयकर अपील सं/Ita Nos.1436-1437/Ahd/2019 निर्धारण वर्ष / Assessment Years : (2015-16 & 2016-17) Nirma Limited, Nirma House, Ashram Road, Ahmedabad-380009. (Gujarat) The Deputy Commissioner Of बनाम/ V/S. Income Tax/The Assistant Commissioner Of Income Tax, Circle 3(1)(1), Ahmedabad. स्थायी लेखा सं./ Pan: Aaacn5350K अपीलार्थी/ (Appellant) प्रत्यर्थी / (Respondent)

For Appellant: Shri Bandish Soparkar, withFor Respondent: Shri Alpesh Parmar, CIT-DR
Section 115JSection 143(3)Section 14A

…heme under which the assessee received sales tax subsidy was a Backward Area Development Scheme of the Government of Gujarat, aimed at encouraging setting up of industries in backward regions. The Hon'ble Supreme Court in CIT v. Ponni Sugars & Chemicals Ltd. (306 ITR 392) has laid down the purpose test to determine the character of subsidy. If the object of subsidy is to promote capital investment, the receipt is capital in nature, irrespective of the form or manner of quantification. Conversely, if the object is to supplement trade receipts, it would be revenue. 13 ITA Nos.1412-1413/Ahd/2019 with others Nirma Li…

Nirma Limited, Ahmedabad vs. The Dcti, Circle-3(1)(1), Ahmedabad

ITA 1413/AHD/2019[2016-17]Status: DisposedITAT Ahmedabad28 Aug 2025AY 2016-17

Bench: Shri Sanjay Garg & Shri Makarand V. Mahadeokarआयकर अपील सं/Ita Nos.1412 & 1413/Ahd/2019 निर्धारण वर्ष / Assessment Years: (2015-2016 & 2016-17) Nirma Limited, Nirma House, Ashram Road, Ahmedabad-380009. (Gujarat) बनाम / V/S. The Deputy Commissioner Of Income Tax, Circle 3(1)(1), Ahmedabad. स्थायी लेखा सं./Pan : Aaacn5350K आयकर अपील सं/Ita Nos.1436-1437/Ahd/2019 निर्धारण वर्ष / Assessment Years : (2015-16 & 2016-17) The Assistant Commissioner Of Income Tax, Circle 3(1)(1), Ahmedabad. Nirma Limited, बनाम / V/S. Nirma House, Ashram Road, Ahmedabad-380009. (Gujarat) स्थायी लेखा सं./ Pan: Aaacn5350K & C.O Nos.11-12/Ahd/2020 In आयकर अपील सं/Ita Nos.1436-1437/Ahd/2019 निर्धारण वर्ष / Assessment Years : (2015-16 & 2016-17) Nirma Limited, Nirma House, Ashram Road, Ahmedabad-380009. (Gujarat) The Deputy Commissioner Of बनाम/ V/S. Income Tax/The Assistant Commissioner Of Income Tax, Circle 3(1)(1), Ahmedabad. स्थायी लेखा सं./ Pan: Aaacn5350K अपीलार्थी/ (Appellant) प्रत्यर्थी / (Respondent)

For Appellant: Shri Bandish Soparkar, withFor Respondent: Shri Alpesh Parmar, CIT-DR
Section 115JSection 143(3)Section 14A

…heme under which the assessee received sales tax subsidy was a Backward Area Development Scheme of the Government of Gujarat, aimed at encouraging setting up of industries in backward regions. The Hon'ble Supreme Court in CIT v. Ponni Sugars & Chemicals Ltd. (306 ITR 392) has laid down the purpose test to determine the character of subsidy. If the object of subsidy is to promote capital investment, the receipt is capital in nature, irrespective of the form or manner of quantification. Conversely, if the object is to supplement trade receipts, it would be revenue. ITA Nos.1412-1413/Ahd/2019 with others Nirma Limit…