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 367,181 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.

Asst. CIT - 11(1)(2), Mumbai vs. Sangam India Ltd, Mumbai

In the result, appeals of the revenue are dismissed

ITA 6197/MUM/2017[2012-13]Status: DisposedITAT Mumbai07 Sept 2020AY 2012-13

Bench: Shri C.N.Prasad, Jm & Shri M.Balaganesh, Am

Section 143(3)Section 2(24)

…bsidy was granted for industrial development in the State of Rajasthan and for Textile industrialization and creating employment opportunities. Thus, applying the purpose test laid down by the Supreme Court, in the case of Ponni Sugars & Chemicals Ltd. Vs CIT 306 ITR 392 (S.C.), the subsidy received by the appellant is in the nature of capital receipt and not revenue receipt. 3.3. We find from the above that the ld. CIT(A) had categorically made it clear that the aforesaid subsidies were given to the assessee for promoting capacity expansion, globalization of textile trade and employment generation and would be…

Raykal Aluminium Company Private Limited, Bhubaneswar vs. DCIT, Corporate Circle-1(2), Bhubaneswar

In the result, appeal of the assessee is dismissed

ITA 488/CTK/2017[2013-14]Status: DisposedITAT Cuttack30 Jul 2020AY 2013-14

Bench: Shri Chandra Mohan Garg & Laxmi Prasad Sahuassessment Year: 2013-14

For Appellant: Shri P.K.Mishra, ARFor Respondent: Shri Subhendu Dutta, DR

…penses are not P a g e 6 | 13 ITA No. 4 88/CTK/201 7 Assessm ent Y ear : 20 13- 14 chargeable to tax. In this connection, the Supreme Court in the case of OT vrs. Karnal Cooperative Sugar Mills Ltd. [243 ITR 2], CIT vrs. M/s. Pormi Sugars and Chemicals Ltd (306 ITR 392) and CIT vs Maheswari Devi Jute Mills Ltd. (57 ITR 36) has held that capital receipts are not liable to tax under the Income tax Act, 1961.” 10. The Assessing Officer dismissed the contention of the assessee by observing as under: “ 5.2 From the above stated facts, it is clear that the amount of Rs.1,33,97,073 funded by M/s. DUBAL to the assess…

DCIT (Ltu), New Delhi vs. M/S. Nestle India Ltd., Gurgaon

ITA 2020/DEL/2014[2009-10]Status: DisposedITAT Delhi22 Jul 2020AY 2009-10
Section 143(1)Section 14ASection 244ASection 92

…1998 only; - one of the major requirement of the scheme was that the unit should employ at least 80% of the local employees. 7.3.2 The Ld. CIT (A) placed reliance on the following decisions while holding as aforesaid: - Ponni Sugar & Chemicals Ltd. vs. CIT: 306 ITR 392 (SC) dated 16.09.2008 - Sahney Steel and Press Works Ltd. and Others v. CIT: 228 ITR 253 (SC) dated 19.09.1997 - CIT v. Ruby Rubber Works Ltd.: 178 ITR 181 (Kerala) dated 06.04.1989 [The said decision has been approved by the Supreme Court in the case of Kalpetta Estate Ltd. v. CIT: 221 ITR 601 (SC) dated 16.06.1996] 7.3.3 We note that it is set…

M/S. Nestle India Ltd, New Delhi vs. DCIT, Ltu, New Delhi

ITA 1954/DEL/2014[2009-10]Status: DisposedITAT Delhi22 Jul 2020AY 2009-10
Section 143(1)Section 14ASection 244ASection 92

…1998 only; - one of the major requirement of the scheme was that the unit should employ at least 80% of the local employees. 7.3.2 The Ld. CIT (A) placed reliance on the following decisions while holding as aforesaid: - Ponni Sugar & Chemicals Ltd. vs. CIT: 306 ITR 392 (SC) dated 16.09.2008 - Sahney Steel and Press Works Ltd. and Others v. CIT: 228 ITR 253 (SC) dated 19.09.1997 - CIT v. Ruby Rubber Works Ltd.: 178 ITR 181 (Kerala) dated 06.04.1989 [The said decision has been approved by the Supreme Court in the case of Kalpetta Estate Ltd. v. CIT: 221 ITR 601 (SC) dated 16.06.1996] 7.3.3 We note that it is set…

Mahindra & Mahindra Ltd, Mumbai vs. ACIT Cir 2(2)2, Mumbai

In the result, all the appeals of the assessee are partly allowed for statistical purposes and appeal of the revenue is dismissed

ITA 1449/MUM/2016[2011-12]Status: DisposedITAT Mumbai19 Jun 2020AY 2011-12

Bench: Shri Mahavir Singh, Vp & Shri M.Balaganesh, Am & Sa No.462/Mum/2019 (Arising Out Of Ita No.1449/Mum/2016) (Assessment Year : 2011-12) Mahindra & Mahindra Vs. Dy. Commissioner Of Limited, Income-Tax Corporation Taxation, Circle-2(2)(2) P.K. Kurne Chowk, Aayakar Bhavan, Worli, Mumbai – 400020 M.K.Road, Mumbai-400020 Pan/Gir No.Aaacm3025E (Appellant) .. (Respondent) & Sa No.461/Mum/2019 (Arising Out Of Ita No.7382/Mum/2017) (Assessment Year : 2013-14) Mahindra & Mahindra Vs. Dy. Commissioner Of Limited, Income-Tax Corporation Taxation, Circle-2(2)(2) P.K. Kurne Chowk, Aayakar Bhavan, Worli, Mumbai – 400020 M.K.Road, Mumbai-400020 Pan/Gir No.Aaacm3025E (Appellant) .. (Respondent) Dy. Commissioner Of Vs. Mahindra & Mahindra Limited, Income-Tax Corporation Taxation, Circle-2(2)(2) P.K. Kurne Chowk, Aayakar Bhavan, Worli, Mumbai – 400020 M.K.Road, Mumbai- 400020 Pan/Gir No.Aaacm3025E (Appellant) .. (Respondent) Mahindra & Mahindra Vs. Asst. Commissioner Of Limited, Income-Tax Corporation Taxation, Circle-2(2)(2) P.K. Kurne Chowk, Aayakar Bhavan, Worli, Mumbai – 400020 M.K.Road, Mumbai-400020 Pan/Gir No.Aaacm3025E (Appellant) .. (Respondent)

Section 143(3)Section 144C(5)

…dinate Bench of Delhi Tribunal in the case of LG Electronics India Pvt. Ltd., in ITA No.2163/Del/2015 dated 19/04/2017 wherein by placing reliance on the decision of the Hon’ble Supreme Court in the case of CIT vs. Ponni Sugars and Chemicals Ltd., reported in 306 ITR 392 had held that Industrial Promotion Subsidy received under Maharashtra 2001 package scheme of incentives to be capital receipt. The copy of the said Delhi Tribunal decision was placed on record by drawing specific reference to paras 4-7 thereof by the ld. AR. We are in agreement with the argument advanced by the ld. AR herein that the purpose for…

DCIT, C-1, Ludhiana vs. M/S Vardhman Textiles Limited, Ludhiana

The appeal of the Revenue is partly allowed for

ITA 612/CHANDI/2019[2009-10]Status: DisposedITAT Chandigarh28 May 2020AY 2009-10

Bench: Shri Sanjay Garg & Smt.Annapurna Guptaआयकर अपील सं./ Ita No.484 /Chd/2019 "नधा"रण वष" / Assessment Year : 2008-09

For Appellant: S/Shri Subhash Aggarwal, AdvFor Respondent: Smt.C.Chanderkanta, CIT DR
Section 14ASection 250(6)Section 80I

…आयकर अपील"य अ"धकरण, च"डीगढ़ "यायपीठ “बी”, च"डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH ‘B, CHANDIGARH "ी संजय गग", "याय"क सद"य एवं "ीमती अ"नपूणा" गु"ता, लेखा सद"य BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No.484 /Chd/2019 "नधा"रण वष" / Assessment Year : 2008-09 Vardhman Textiles Limited, The A.C.I.T., बनाम Chandigarh Road, Ludhiana. Circle-1, Ludhiana. "थायी लेखा सं./PAN NO: AABCM4692E अपीलाथ"/Appellant ""यथ"/Respondent & आयकर अपील सं./ ITA No.611 /Chd/2019 "नधा"रण वष" / Assessment Year : 2008-09 The D.C.I.T., Vardhman Textiles Limi…

DCIT, C-1, Ludhiana vs. M/S Vardhman Textiles Limited, Ludhiana

The appeal of the Revenue is partly allowed for

ITA 611/CHANDI/2019[2008-09]Status: DisposedITAT Chandigarh28 May 2020AY 2008-09

Bench: Shri Sanjay Garg & Smt.Annapurna Guptaआयकर अपील सं./ Ita No.484 /Chd/2019 "नधा"रण वष" / Assessment Year : 2008-09

For Appellant: S/Shri Subhash Aggarwal, AdvFor Respondent: Smt.C.Chanderkanta, CIT DR
Section 14ASection 250(6)Section 80I

…आयकर अपील"य अ"धकरण, च"डीगढ़ "यायपीठ “बी”, च"डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH ‘B, CHANDIGARH "ी संजय गग", "याय"क सद"य एवं "ीमती अ"नपूणा" गु"ता, लेखा सद"य BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No.484 /Chd/2019 "नधा"रण वष" / Assessment Year : 2008-09 Vardhman Textiles Limited, The A.C.I.T., बनाम Chandigarh Road, Ludhiana. Circle-1, Ludhiana. "थायी लेखा सं./PAN NO: AABCM4692E अपीलाथ"/Appellant ""यथ"/Respondent & आयकर अपील सं./ ITA No.611 /Chd/2019 "नधा"रण वष" / Assessment Year : 2008-09 The D.C.I.T., Vardhman Textiles Limi…

M/S Vardhman Textiles Limited, Ludhiana vs. JCIT, C-1, Ludhiana

The appeal of the Revenue is partly allowed for

ITA 485/CHANDI/2019[2009-10]Status: DisposedITAT Chandigarh28 May 2020AY 2009-10

Bench: Shri Sanjay Garg & Smt.Annapurna Guptaआयकर अपील सं./ Ita No.484 /Chd/2019 "नधा"रण वष" / Assessment Year : 2008-09

For Appellant: S/Shri Subhash Aggarwal, AdvFor Respondent: Smt.C.Chanderkanta, CIT DR
Section 14ASection 250(6)Section 80I

…आयकर अपील"य अ"धकरण, च"डीगढ़ "यायपीठ “बी”, च"डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH ‘B, CHANDIGARH "ी संजय गग", "याय"क सद"य एवं "ीमती अ"नपूणा" गु"ता, लेखा सद"य BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No.484 /Chd/2019 "नधा"रण वष" / Assessment Year : 2008-09 Vardhman Textiles Limited, The A.C.I.T., बनाम Chandigarh Road, Ludhiana. Circle-1, Ludhiana. "थायी लेखा सं./PAN NO: AABCM4692E अपीलाथ"/Appellant ""यथ"/Respondent & आयकर अपील सं./ ITA No.611 /Chd/2019 "नधा"रण वष" / Assessment Year : 2008-09 The D.C.I.T., Vardhman Textiles Limi…

M/S Vardhman Textiles Limited, Ludhiana vs. ACIT, C-1, Ludhiana

The appeal of the Revenue is partly allowed for

ITA 484/CHANDI/2019[2008-09]Status: DisposedITAT Chandigarh28 May 2020AY 2008-09

Bench: Shri Sanjay Garg & Smt.Annapurna Guptaआयकर अपील सं./ Ita No.484 /Chd/2019 "नधा"रण वष" / Assessment Year : 2008-09

For Appellant: S/Shri Subhash Aggarwal, AdvFor Respondent: Smt.C.Chanderkanta, CIT DR
Section 14ASection 250(6)Section 80I

…आयकर अपील"य अ"धकरण, च"डीगढ़ "यायपीठ “बी”, च"डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH ‘B, CHANDIGARH "ी संजय गग", "याय"क सद"य एवं "ीमती अ"नपूणा" गु"ता, लेखा सद"य BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No.484 /Chd/2019 "नधा"रण वष" / Assessment Year : 2008-09 Vardhman Textiles Limited, The A.C.I.T., बनाम Chandigarh Road, Ludhiana. Circle-1, Ludhiana. "थायी लेखा सं./PAN NO: AABCM4692E अपीलाथ"/Appellant ""यथ"/Respondent & आयकर अपील सं./ ITA No.611 /Chd/2019 "नधा"रण वष" / Assessment Year : 2008-09 The D.C.I.T., Vardhman Textiles Limi…

DCIT, C-1, Ludhiana vs. Vardhman Textiles Ltd., Ludhiana

The appeal of the Revenue is partly allowed for

ITA 613/CHANDI/2019[2013-14]Status: DisposedITAT Chandigarh27 May 2020AY 2013-14

Bench: Shri Sanjay Garg & Smt.Annapurna Guptaआयकर अपील सं./ Ita No.484 /Chd/2019 "नधा"रण वष" / Assessment Year : 2008-09

For Appellant: S/Shri Subhash Aggarwal, AdvFor Respondent: Smt.C.Chanderkanta, CIT DR
Section 14ASection 250(6)Section 80I

…आयकर अपील"य अ"धकरण, च"डीगढ़ "यायपीठ “बी”, च"डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH ‘B, CHANDIGARH "ी संजय गग", "याय"क सद"य एवं "ीमती अ"नपूणा" गु"ता, लेखा सद"य BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No.484 /Chd/2019 "नधा"रण वष" / Assessment Year : 2008-09 Vardhman Textiles Limited, The A.C.I.T., बनाम Chandigarh Road, Ludhiana. Circle-1, Ludhiana. "थायी लेखा सं./PAN NO: AABCM4692E अपीलाथ"/Appellant ""यथ"/Respondent & आयकर अपील सं./ ITA No.611 /Chd/2019 "नधा"रण वष" / Assessment Year : 2008-09 The D.C.I.T., Vardhman Textiles Limi…

Krishi Rasayan Export Pvt. Ltd., Kolkata vs. PCIT, 4, Kolkata

Appeals are allowed

ITA 743/KOL/2019[2014-15]Status: DisposedITAT Kolkata28 Feb 2020AY 2014-15

Bench: Shri J. Sudhakar Reddy, Am & Shri S. S. Godara, Jm आयकर अपीलसं./I.T.A Nos.742&743/Kol/2019 ("नधा"रण वष" / Assessment Years: 2013-14 & 2014-15) Krishi Rasayan Exports(P) Ltd. Vs. Pcit-4, Kolkata 29, Lala Lajpath Rai Sarani (Elgin Road), Kolkata – 700020. "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aacck4124G (Appellant) .. (Respondent) Appellant By : Shri S.D. Verma, Advocate Respondent By : Smt. Ranu Biswas, Addl. Cit सुनवाईक"तार"ख/ Date Of Hearing : 21/02/2020 घोषणाक"तार"ख/Date Of Pronouncement : 28/02/2020

For Appellant: Shri S.D. Verma, AdvocateFor Respondent: Smt. Ranu Biswas, Addl. CIT
Section 115JSection 263

…IN THE INCOME TAX APPELLATE TRIBUNAL “B”, BENCH KOLKATA BEFORE SHRI J. SUDHAKAR REDDY, AM & SHRI S. S. GODARA, JM आयकर अपीलसं./I.T.A Nos.742&743/Kol/2019 ("नधा"रण वष" / Assessment Years: 2013-14 & 2014-15) Krishi Rasayan Exports(P) Ltd. Vs. PCIT-4, Kolkata 29, Lala Lajpath Rai Sarani (Elgin Road), Kolkata – 700020. "थायीलेखासं./जीआइआरसं./PAN/GIR No.: AACCK4124G (Appellant) .. (Respondent) Appellant by : Shri S.D. Verma, Advocate Respondent by : Smt. Ranu Biswas, Addl. CIT सुनवाईक"तार"ख/ Date of Hearing : 21/02/2020 घोषणाक"तार"ख/Date of Pronouncement : 28/02/2020 आदेश / O R D E R Per Shri S. S. Godara: These tw…

Krishi Rasayan Export Pvt. Ltd., Kolkata vs. PCIT, 4, Kolkata

Appeals are allowed

ITA 742/KOL/2019[2013-14]Status: DisposedITAT Kolkata28 Feb 2020AY 2013-14

Bench: Shri J. Sudhakar Reddy, Am & Shri S. S. Godara, Jm आयकर अपीलसं./I.T.A Nos.742&743/Kol/2019 ("नधा"रण वष" / Assessment Years: 2013-14 & 2014-15) Krishi Rasayan Exports(P) Ltd. Vs. Pcit-4, Kolkata 29, Lala Lajpath Rai Sarani (Elgin Road), Kolkata – 700020. "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aacck4124G (Appellant) .. (Respondent) Appellant By : Shri S.D. Verma, Advocate Respondent By : Smt. Ranu Biswas, Addl. Cit सुनवाईक"तार"ख/ Date Of Hearing : 21/02/2020 घोषणाक"तार"ख/Date Of Pronouncement : 28/02/2020

For Appellant: Shri S.D. Verma, AdvocateFor Respondent: Smt. Ranu Biswas, Addl. CIT
Section 115JSection 263

…IN THE INCOME TAX APPELLATE TRIBUNAL “B”, BENCH KOLKATA BEFORE SHRI J. SUDHAKAR REDDY, AM & SHRI S. S. GODARA, JM आयकर अपीलसं./I.T.A Nos.742&743/Kol/2019 ("नधा"रण वष" / Assessment Years: 2013-14 & 2014-15) Krishi Rasayan Exports(P) Ltd. Vs. PCIT-4, Kolkata 29, Lala Lajpath Rai Sarani (Elgin Road), Kolkata – 700020. "थायीलेखासं./जीआइआरसं./PAN/GIR No.: AACCK4124G (Appellant) .. (Respondent) Appellant by : Shri S.D. Verma, Advocate Respondent by : Smt. Ranu Biswas, Addl. CIT सुनवाईक"तार"ख/ Date of Hearing : 21/02/2020 घोषणाक"तार"ख/Date of Pronouncement : 28/02/2020 आदेश / O R D E R Per Shri S. S. Godara: These tw…

M/S Steel Strips Wheels Limited, Chandigarh vs. DCIT, CC-II, Chandigarh

In the result, appeal of the Department is dismissed and that of the assessee is allowed

ITA 1287/CHANDI/2018[2013-14]Status: DisposedITAT Chandigarh27 Feb 2020AY 2013-14
For Appellant: Shri Ashwani Kumar, CAFor Respondent: Dr. G.S. Phani Kishore, CIT(DR)

…8/2004. 755/2004 & 725/2004, 398 ITR 216 wherein sales tax subsidy has been held to be a revenue receipt. v) Whether on the facts and in the circumstances of the case the decision of the Hon'ble Supreme Court in the case Ponni Sugars and Chemicals Ltd. (2008) 306 ITR 392 (SC) and treating the sales tax subsidy as capital receipts in nature was wrongly followed despite the observation of the AO in the assessment order that the facts of the present case are distinguishable from that of Ponni Sugar and Chemicals Ltd. vi) Whether on the facts and in the circumstances of the case the fact that sale tax subsidy which i…

DCIT, CC-II, Chandigarh vs. M/S Steel Strips Wheels Limited, Chandigarh

In the result, appeal of the Department is dismissed and that of the assessee is allowed

ITA 1233/CHANDI/2018[2013-14]Status: DisposedITAT Chandigarh27 Feb 2020AY 2013-14
For Appellant: Shri Ashwani Kumar, CAFor Respondent: Dr. G.S. Phani Kishore, CIT(DR)

…8/2004. 755/2004 & 725/2004, 398 ITR 216 wherein sales tax subsidy has been held to be a revenue receipt. v) Whether on the facts and in the circumstances of the case the decision of the Hon'ble Supreme Court in the case Ponni Sugars and Chemicals Ltd. (2008) 306 ITR 392 (SC) and treating the sales tax subsidy as capital receipts in nature was wrongly followed despite the observation of the AO in the assessment order that the facts of the present case are distinguishable from that of Ponni Sugar and Chemicals Ltd. vi) Whether on the facts and in the circumstances of the case the fact that sale tax subsidy which i…

Srf Ltd., New Delhi vs. DCIT (Ltu), New Delhi

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

ITA 5784/DEL/2016[2012-13]Status: DisposedITAT Delhi24 Feb 2020AY 2012-13

Bench: Shri Amit Shukla & Shri Prashant Maharishi

For Appellant: Shri Pradeep Dinodia, AdvFor Respondent: Shri H.K. Chaudhary, CIT-D.R
Section 10ASection 115JSection 14ASection 92BSection 92C

…dy was held to be as a capital receipt: • CIT –vs.- Sh. Sham Lal Bansal (Hon’ble Punjab & Haryana High Court, ITA No. 472 of 2010) • PCIT v. Ankit Metal & Power Ltd. [416 ITR 591 2019] Cal High Court • CIT vs.- Ponni Sugars & Chemicals Ltd. reported in (2008) 306 ITR 392 (SC) • CIT vs.- Rasoi Ltd. [(2011) 335 ITR 438 (Cal.)] • CIT v. Chaphalkar Brothers [2017] 88 taxmann.com 178 (SC)/ (2018) 400 ITR 279 (SC) • DCIT vs.- Reliance Industries (2004) 88 ITD 273 (Mum.)(SB); • CIT vs. Birla VXL Lt d. (2013) 90 DTR 376 (Guj.)(HC); • Hydro Carbons & Chemicals vs.- ACIT (ITA No. 1982-86/Kol/09); I.T.A. No.5784/DEL/2016 2…

M/S Crystal Crop Protection Pvt. Ltd., Delhi vs. DCIT, New Delhi

In the result, the appeal of the assessee is allowed

ITA 1539/DEL/2016[2011-12]Status: DisposedITAT Delhi19 Dec 2019AY 2011-12

Bench: Sh. Bhavnesh Sainidr. B. R. R. Kumarita No. 1539/Del./2016 : Asstt. Year : 2011-12 M/S Crystal Crop Protection (P) Ltd. Vs Dcit, Gi-17, G.T. Karnal Road, Azadpur, Circle-6(2) Delhi-110033 New Delhi (Appellant) (Respondent) Pan No. Aabcj3574E Assessee By : Sh. S. S. Nagar, Ca Revenue By : Ms. Ashima Neb, Sr. Dr Date Of Hearing: 02.12.2019 Date Of Pronouncement: 19.12.2019

For Appellant: Sh. S. S. Nagar, CAFor Respondent: Ms. Ashima Neb, Sr. DR
Section 14ASection 2Section 254

…was not for purchasing capital assets and (v) it was for running the business profitably. On appeal by the assessee, the High Court (333 ITR 335) reversed the lower authorities and held as follows: (i) The ratio of Sahney Steel 228 ITR 253 (SC), Ponni Sugars 306 ITR 392 (SC) and Mepco Industries 319 ITR 208 (SC) is that to determine whether incentives & subsidies are revenue or capital receipts, the purpose underlying the incentives is the determinative test. If the object of the subsidy scheme is to enable the assessee to run the business more profitably then the receipt is on revenue account. On the other hand…

DCIT Cen Cir 3(3) Cen RG 3, Mumbai vs. Welspun Corp Ltd, Mumbai

In the result, appeal filed by the assesee and appeal filed by the revenue are partly allowed for statistical purpose

ITA 5722/MUM/2015[2007-08]Status: DisposedITAT Mumbai13 Dec 2019AY 2007-08

Bench: Shri G. Manjunatha & Shri Ram Lal Negim/S Welspun Corp Ltd. Vs. Dcit,Central Circle-22 Room No.465, 4Th Floor Welspun House 7Th Floor, B-Wing Aaykar Bhawan Kamla Mills Compound M.K.Road Senapati Bapat Marg Mumbai-400 020 Lower Parel Mumbai-400 013 Pan/Gir No.Aaacw0744L (Appellant) .. (Respondent) & Dcit,Central Circle-3(3) Vs. M/S Welspun Corp Ltd. Room No.401, 4Th Floor Welspun House 7Th Floor, B-Wing Aaykar Bhawan M.K.Road Kamla Mills Compound Mumbai-400 020 Senapati Bapat Marg Lower Parel Mumbai-400 013 Pan/Gir No.Aaacw0744L (Appellant) .. (Respondent)

Section 143(3)Section 14ASection 153ASection 32Section 32(1)(iia)Section 37Section 40aSection 43(1)

…the form of Central Excise benefit by the Central Government for sums aggregating to Rs. 35,33,23,171/- is to be treated as capital receipts or revenue receipts. The Hon‘ble Supreme Court in the case of Ponni Sugars & Chemicals Ltd vs CIT, reported in [2008] 306 ITR 392 after referring to the earlier decisions of the Supreme Court in the case of Sahney Steel Works Ltd v CIT, reported in [1999] 228 ITR 253, held that the ―purpose for which subsidy is given is the crucial factor‖. The purpose is to be judged from the character of the receipts in the hands of the assessee which has to be determined with respect to…

Welspun Corp Ltd, Mumbai vs. DCIT Cen Cir 22, Mumbai

In the result, appeal filed by the assesee and appeal filed by the revenue are partly allowed for statistical purpose

ITA 5370/MUM/2015[2007-08]Status: DisposedITAT Mumbai13 Dec 2019AY 2007-08

Bench: Shri G. Manjunatha & Shri Ram Lal Negim/S Welspun Corp Ltd. Vs. Dcit,Central Circle-22 Room No.465, 4Th Floor Welspun House 7Th Floor, B-Wing Aaykar Bhawan Kamla Mills Compound M.K.Road Senapati Bapat Marg Mumbai-400 020 Lower Parel Mumbai-400 013 Pan/Gir No.Aaacw0744L (Appellant) .. (Respondent) & Dcit,Central Circle-3(3) Vs. M/S Welspun Corp Ltd. Room No.401, 4Th Floor Welspun House 7Th Floor, B-Wing Aaykar Bhawan M.K.Road Kamla Mills Compound Mumbai-400 020 Senapati Bapat Marg Lower Parel Mumbai-400 013 Pan/Gir No.Aaacw0744L (Appellant) .. (Respondent)

Section 143(3)Section 14ASection 153ASection 32Section 32(1)(iia)Section 37Section 40aSection 43(1)

…the form of Central Excise benefit by the Central Government for sums aggregating to Rs. 35,33,23,171/- is to be treated as capital receipts or revenue receipts. The Hon‘ble Supreme Court in the case of Ponni Sugars & Chemicals Ltd vs CIT, reported in [2008] 306 ITR 392 after referring to the earlier decisions of the Supreme Court in the case of Sahney Steel Works Ltd v CIT, reported in [1999] 228 ITR 253, held that the ―purpose for which subsidy is given is the crucial factor‖. The purpose is to be judged from the character of the receipts in the hands of the assessee which has to be determined with respect to…

DCIT Corporate Circle 2(1), Chennai vs. The India Cements Ltd., Chennai

In the result, the appeal of the Revenue in I

ITA 2416/CHNY/2019[2016-17]Status: DisposedITAT Chennai12 Dec 2019AY 2016-17

Bench: Shri George Mathan & Shri S. Jayaraman

For Respondent: Mr. Saroj Kumar, Advocate

…exports, it may have to pay the entire customs duty. The benefit connected with the acquisition of a capital asset cannot be brought to tax u/s.28(iv) of the Act. It is to be noted that the Supreme Court in the case of CIT v. Ponni Sugars and Chemicals Ltd. (306 ITR 392) has held that the character of receipt in the hands of the assessee has to be determined with respect to the purpose for which the subsidy is granted. In other words, one has to apply the purpose test. The point of time at which subsidy is paid is not relevant. The source is immaterial. If the object of the subsidy is to enable the assessee to r…

DCIT Corporate Circle 2(1), Chennai vs. The India Cements Ltd., Chennai

In the result, the appeal of the Revenue in I

ITA 2415/CHNY/2019[2015-16]Status: DisposedITAT Chennai12 Dec 2019AY 2015-16

Bench: Shri George Mathan & Shri S. Jayaraman

For Respondent: Mr. Saroj Kumar, Advocate

…exports, it may have to pay the entire customs duty. The benefit connected with the acquisition of a capital asset cannot be brought to tax u/s.28(iv) of the Act. It is to be noted that the Supreme Court in the case of CIT v. Ponni Sugars and Chemicals Ltd. (306 ITR 392) has held that the character of receipt in the hands of the assessee has to be determined with respect to the purpose for which the subsidy is granted. In other words, one has to apply the purpose test. The point of time at which subsidy is paid is not relevant. The source is immaterial. If the object of the subsidy is to enable the assessee to r…