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.

DCIT Cir 4(2)(2), Mumbai vs. Harinagar Sugar Mills P. Ltd, Mumbai

In the result, the appeal filed by the Revenue in ITA N0

ITA 5584/MUM/2015[2012-13]Status: DisposedITAT Mumbai18 Sept 2017AY 2012-13

Bench: Shri Shamim Yahya, Accountnat Member & Shri Pawan Singhdcit-4(2)(2), M/S Harinagar Sugar Mills Ltd. Room No. 640, 6Th Floor, 207, Kalbadevi Road, Vs. Mumbai-400002 Aayakar Bhavan, M.K. Road, Mumbai-400020. Pan: Aaach2831H (Appellant) (Respondent)

For Appellant: Shri Jayesh Desai (AR)
Section 253Section 254(1)

…correctly deleted the impugned addition by treating the reimbursement of excise duty as capital in nature by relying on the decisions of the Hon'ble Apex Court in the cases of Mepco Industries Ltd. Vs. CIT 319 ITR 208, CIT Vs. Ponni Sugars And Chemicals Ltd. 306 ITR 392, the decision of the Calcutta High Court in the case of CIT Vs Rasoi Ltd. 335 ITR 438 (CAL), the decision of the High Court of Gujarat in the case of CIT Vs. Tripti Menthol Industries 35 taxmann.com 515 (Gujarat) and the decision of the J&K High Court in the case of Shree Balaji Alloys Vs. CIT 333 ITR 335 (J&K). 3.3 We have heard both the sides a…

The Commissioner of Income Tax vs. M/S Vardhman Industries Ltd

Appeals are partly allowed, in view of the

ITA/708/2004HC Delhi13 Jul 2017

Bench: CASES PERTAINING TO SPL.DIVISION BENCHES

Section 221Section 4

…ITA 315/2003 & connected cases Page 1 of 27 * IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on: 14.03.2017 Pronounced on: 13.07.2017 + ITA 315/2003 + ITA 316/2003 + ITA 317/2003 + ITA 349/2003 + ITA 434/2005 COMMISSIONER OF INCOME TAX, DELHI ..... Appellant Versus M/S. BHUSHAN STEELS AND STRIPS LTD........ Respondent Through: Sh. Rahul Chaudhary and Ms. Lakshmi Gurung, Advocates, for CIT, ITA Nos.315/2003, 316/2003, 317/2003 & 349/2003. Sh. Zoheb Hossain, Advocate, for CIT in ITA 434/2005. Sh. Ajay Vohra, Sr. Advocate with Ms. Kavita Jha, S…

Commissioner of Income Tax Delhi vs. M/S Bhushan Steels & Strips Ltd

Appeals are partly allowed, in view of the

ITA/317/2003HC Delhi13 Jul 2017

Bench: CASES PERTAINING TO SPL.DIVISION BENCHES

Section 221Section 4

…ITA 315/2003 & connected cases Page 1 of 27 * IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on: 14.03.2017 Pronounced on: 13.07.2017 + ITA 315/2003 + ITA 316/2003 + ITA 317/2003 + ITA 349/2003 + ITA 434/2005 COMMISSIONER OF INCOME TAX, DELHI ..... Appellant Versus M/S. BHUSHAN STEELS AND STRIPS LTD........ Respondent Through: Sh. Rahul Chaudhary and Ms. Lakshmi Gurung, Advocates, for CIT, ITA Nos.315/2003, 316/2003, 317/2003 & 349/2003. Sh. Zoheb Hossain, Advocate, for CIT in ITA 434/2005. Sh. Ajay Vohra, Sr. Advocate with Ms. Kavita Jha, S…

The Commissioner of the Income vs. M/S Vardhman Industries Ltd

Appeals are partly allowed, in view of the

ITA/725/2004HC Delhi13 Jul 2017

Bench: CASES PERTAINING TO SPL.DIVISION BENCHES

Section 221Section 4

…ITA 315/2003 & connected cases Page 1 of 27 * IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on: 14.03.2017 Pronounced on: 13.07.2017 + ITA 315/2003 + ITA 316/2003 + ITA 317/2003 + ITA 349/2003 + ITA 434/2005 COMMISSIONER OF INCOME TAX, DELHI ..... Appellant Versus M/S. BHUSHAN STEELS AND STRIPS LTD........ Respondent Through: Sh. Rahul Chaudhary and Ms. Lakshmi Gurung, Advocates, for CIT, ITA Nos.315/2003, 316/2003, 317/2003 & 349/2003. Sh. Zoheb Hossain, Advocate, for CIT in ITA 434/2005. Sh. Ajay Vohra, Sr. Advocate with Ms. Kavita Jha, S…

Commissioner of Income Tax Delhi vs. M/S Bhushan Steels & Strips Ltd

Appeals are partly allowed, in view of the

ITA/434/2005HC Delhi13 Jul 2017

Bench: CASES PERTAINING TO SPL.DIVISION BENCHES

Section 221Section 4

…ITA 315/2003 & connected cases Page 1 of 27 * IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on: 14.03.2017 Pronounced on: 13.07.2017 + ITA 315/2003 + ITA 316/2003 + ITA 317/2003 + ITA 349/2003 + ITA 434/2005 COMMISSIONER OF INCOME TAX, DELHI ..... Appellant Versus M/S. BHUSHAN STEELS AND STRIPS LTD........ Respondent Through: Sh. Rahul Chaudhary and Ms. Lakshmi Gurung, Advocates, for CIT, ITA Nos.315/2003, 316/2003, 317/2003 & 349/2003. Sh. Zoheb Hossain, Advocate, for CIT in ITA 434/2005. Sh. Ajay Vohra, Sr. Advocate with Ms. Kavita Jha, S…

Commissioner of Income Tax Delhi vs. M/S Bhushan Steels & Strips Ltd

Appeals are partly allowed, in view of the

ITA/316/2003HC Delhi13 Jul 2017

Bench: CASES PERTAINING TO SPL.DIVISION BENCHES

Section 221Section 4

…ITA 315/2003 & connected cases Page 1 of 27 * IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on: 14.03.2017 Pronounced on: 13.07.2017 + ITA 315/2003 + ITA 316/2003 + ITA 317/2003 + ITA 349/2003 + ITA 434/2005 COMMISSIONER OF INCOME TAX, DELHI ..... Appellant Versus M/S. BHUSHAN STEELS AND STRIPS LTD........ Respondent Through: Sh. Rahul Chaudhary and Ms. Lakshmi Gurung, Advocates, for CIT, ITA Nos.315/2003, 316/2003, 317/2003 & 349/2003. Sh. Zoheb Hossain, Advocate, for CIT in ITA 434/2005. Sh. Ajay Vohra, Sr. Advocate with Ms. Kavita Jha, S…

Commissioner of Income Tax Delhi vs. M/S Bhushan Steels & Strips Ltd

Appeals are partly allowed, in view of the

ITA/315/2003HC Delhi13 Jul 2017

Bench: CASES PERTAINING TO SPL.DIVISION BENCHES

Section 221Section 4

…ITA 315/2003 & connected cases Page 1 of 27 * IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on: 14.03.2017 Pronounced on: 13.07.2017 + ITA 315/2003 + ITA 316/2003 + ITA 317/2003 + ITA 349/2003 + ITA 434/2005 COMMISSIONER OF INCOME TAX, DELHI ..... Appellant Versus M/S. BHUSHAN STEELS AND STRIPS LTD........ Respondent Through: Sh. Rahul Chaudhary and Ms. Lakshmi Gurung, Advocates, for CIT, ITA Nos.315/2003, 316/2003, 317/2003 & 349/2003. Sh. Zoheb Hossain, Advocate, for CIT in ITA 434/2005. Sh. Ajay Vohra, Sr. Advocate with Ms. Kavita Jha, S…

DCIT, CC-Xvi, Kolkata vs. South Asian Petrochem Ltd, Kolkata

In the result, appeals of Revenue stand dismissed

ITA 1222/KOL/2014[2006-2007]Status: DisposedITAT Kolkata03 May 2017AY 2006-2007

Bench: Shri N.V.Vasudevan & Shri Waseem Ahmedassessment Year :2006-07

Section 143(3)

…and not the method of the payment or its measure, and makes it fall within capital or revenue. Thus, the amount paid as subsidy was really capital in nature.—CIT vs. Ponni Sugars & Chemicals Ltd. & Ors. (2008) 219 CTR (SC) 105 : (2008) 13 DTR (SC) 1 : (2008) 306 ITR 392 (SC) relied on; Senairam Doongarmall vs. CIT AIR 1961 SC 1579 applied; CIT vs. Abhishek Industries Ltd. (2006) 205 CTR (P&H) 304 : (2006) 156 Taxman 257 (P&H) distinguished. Subsidy received by assessee from the State Government under a scheme of industrial promotion which was meant to provide financial assistance to specified industries for exp…

Lg Electronics India Pvt. Ltd., Uttar Pradesh vs. ACIT, Noida

In the result, the appeal is allowed

ITA 2163/DEL/2015[2008-09]Status: DisposedITAT Delhi19 Apr 2017AY 2008-09

Bench: Shri R.S. Syal & Ms Suchitra Kambleassessment Year : 2008-09

For Appellant: Shri Ajay Vohra, Sr. Advocate, and Shri Gaurav Jain &
Section 143(3)Section 144CSection 263

…the setting up new industry or its expansion, then, the subsidy so received assumes the character of a capital receipt irrespective of the form in which it is disbursed. The Hon'ble Supreme Court in the case of CIT vs. Ponni Sugars and Chemicals Ltd. (2008) 306 ITR 392 (SC), has laid down to this extent. On the other hand, an operational subsidy given after the 6 commencement of production, for enabling the assessee to run the business more profitably and not for setting up of the industry is a revenue receipt as has been laid down by the Hon'ble Supreme Court in the case of Sahney Steel & Press Works Ltd., etc…

Ultra Tech Cement Ltd, Mumbai vs. Addl CIT RG 2(2), Mumbai

In the result appeals of the Revenue are dismissed, whereas appeals of the assessee are allowed in part in terms indicated hereinabove

ITA 5065/MUM/2014[2009-10]Status: DisposedITAT Mumbai05 Apr 2017AY 2009-10

Bench: Shri R.C.Sharma, Am & Shri Sandeep Gosain, Jm M/S. Ultratech Cement Ltd., Vs. Acit – 2(2), Mumbai Ahura Centre, B Wing, 2Nd Floor, Mahakali Caves Road, Andheri – East Mumbai – 400 093 Pan/Gir No. Aaacl6442L Appellant) .. Respondent) M/S. Ultratech Cement Ltd., Vs. Dcit – 2(2), Mumbai Ahura Centre, B Wing, 2Nd Floor, Mahakali Caves Road, Andheri – East Mumbai – 400 093 Pan/Gir No. Aaacl6442L Appellant) .. Respondent) Acit – 2(2), Mumbai Vs. M/S. Ultratech Cement Ltd., Ahura Centre, B Wing, 2Nd Floor, Mahakali Caves Road, Andheri – East Mumbai – 400 093 Pan/Gir No. Aaacl6442L Appellant) .. Respondent) Dcit – 2(2), Mumbai Vs. M/S. Ultratech Cement Ltd., Ahura Centre, B Wing, 2Nd Floor, Mahakali Caves Road, Andheri – East Mumbai – 400 093 Pan/Gir No. Aaacl6442L Appellant) .. Respondent) M/S. Ultratech Cement Ltd., Assessee By Shri Arvind Sonde Alongwith Shri Sampat Kabra Revenue By Smt. S.Padmaja

Section 127Section 143(3)Section 14ASection 271Section 80Section 80l

…any evidence to show that it was under an obligation to utilize these amounts for setting up a new unit in a backward area ignoring the said requirement laid down by the Hon'ble Supreme Court in para no. 16 in the case of CIT vs Ponni Sugars & Chemicals Ltd (306 ITR 392 ). 3. For these and other grounds that may be urged at the time of hearing, the decision of the CIT(A) may be set aside and that of the AO restored Assessment Year 2010-11 4. Grounds taken by Assessee are as under:- 1. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals)-5, (hereinafter r…

DCIT 9(3)(1), Mumbai vs. Dicitex Furnishing Ltd, Mumbai

In the result the appeal filed by the revenue is hereby

ITA 4374/MUM/2015[2012-13]Status: DisposedITAT Mumbai24 Mar 2017AY 2012-13

Bench: Shri Rajendra, Am & Shri Amarjit Singh, Jm

For Appellant: Shri Hariom Tulsiyan &For Respondent: Shri Rajguru M. V
Section 115JSection 142(1)Section 143(1)Section 143(2)

…order on the basis of the finding of the judgment of Punjab & Haryana High Court in the case of CIT Vs. Sham Lal Bansal (2011) 11 taxman.com 369 has held while relying on the judgment of Hon’ble Supreme Court in the case of Ponni Sugar & Chemicals Ltd. (2008) 306 ITR 392 that the subsidy received for payment of loan taken for building and plan and machinery under TUFS scheme of the Government was a capital receipt. The Hon’ble Punjab & Haryana High Court has also A.Y.2011-12 & 2012-13 relied upon the finding of the Hon’ble Supreme Court in the case of Ponni Sugar & Chemicals Ltd. (2008) 306 ITR 392. Subsequently…

DCIT 9(3)(1), Mumbai vs. Dicitex Furnishings Ltd, Mumbai

In the result the appeal filed by the revenue is hereby

ITA 2148/MUM/2015[2011-12]Status: DisposedITAT Mumbai24 Mar 2017AY 2011-12

Bench: Shri Rajendra, Am & Shri Amarjit Singh, Jm

For Appellant: Shri Hariom Tulsiyan &For Respondent: Shri Rajguru M. V
Section 115JSection 142(1)Section 143(1)Section 143(2)

…order on the basis of the finding of the judgment of Punjab & Haryana High Court in the case of CIT Vs. Sham Lal Bansal (2011) 11 taxman.com 369 has held while relying on the judgment of Hon’ble Supreme Court in the case of Ponni Sugar & Chemicals Ltd. (2008) 306 ITR 392 that the subsidy received for payment of loan taken for building and plan and machinery under TUFS scheme of the Government was a capital receipt. The Hon’ble Punjab & Haryana High Court has also A.Y.2011-12 & 2012-13 relied upon the finding of the Hon’ble Supreme Court in the case of Ponni Sugar & Chemicals Ltd. (2008) 306 ITR 392. Subsequently…

Sicpa India Private Limited (Formerly Known As Sicpa India Ltd.), Kolkata vs. DCIT, Circle -8, Kolkata

In the result appeal by the Assessee is partly allowed for statistical purpose while appeal by the revenue is dismissed

ITA 885/KOL/2012[2007-08]Status: DisposedITAT Kolkata22 Mar 2017AY 2007-08

Bench: Hon’Ble Sri N.V.Vasudevan, Jm & Dr.Arjun Lal Saini, Am] I.T.A No. 885/Kol/2012 Assessment Year : 2007-08 Sicpa India Private Limited -Vs.- D.C.I.T., Circle-8, (Formerly Known As Kolkata Sicpa India Ltd. ), Kolkata [Pan : Aadcs 6121 L] (Respondent) (Appellant) I.T.A No. 933/Kol/2012 Assessment Year : 2007-08 D.C.I.T., Circle-8, Sicpa India Private Limited Kolkata (Formerly Known As Sicpa India Ltd. ), Kolkata [Pan : Aadcs 6121 L] (Respondent) (Appellant) For The Assessee : Shri Prashant Jaiswal, Ar For The Department : Shri Rajat Kumar Kureel, Jcit.Sr.Dr Date Of Hearing : 07.03.2017. Date Of Pronouncement : 22.03.2017. Order Per N.V.Vasudevan, Jm

For Appellant: Shri Prashant Jaiswal, ARFor Respondent: Shri Rajat Kumar Kureel, JCIT.Sr.DR
Section 10(35)Section 14ASection 43B

…ised return of income filed on 31.03.2009 the assessee excluded excise duty exemption of Rs.2,14,60,052/- in the computation of book profit u/s 115JB of the Act by placing reliance on the decision in the case of CIT –vs- Ponni Sugars and Chemicals Ltd. (2008) 306 ITR 392 (SC). The AO in the order u/s 143(3) held that as per the explanation and provisions contained in 115JB refund of excise duty should not be excluded in the computation of book profit u/s 115JB. 12. Before the CIT(A) the assessee submitted that in F.Y.2005-06 the assessee set up a new unit in the State of Sikkim. In terms of Office Memorandum No.…

ACIT, CC-Xx, Kolkata vs. M/S. Paharpur Cooling Towers Limited, Kolkata

In the result, this ground is allowed

ITA 1370/KOL/2010[2001-02]Status: DisposedITAT Kolkata15 Mar 2017AY 2001-02

Bench: Shri M. Balaganesh, Am & Shri S. S. Viswanethra Ravi, Jm]

For Appellant: Shri Sallong Yaden, Addl. CITFor Respondent: Shri Navin Verma & Nitin Agarwal, ARs
Section 143(3)

…al investment subsidy was provided for investment in the backward areas to create employment opportunities to sustain long term growth and following the decision of the Hon’ble Supreme Court in the case of CIT vs Ponni Sugar & Chemicals Ltd reported in (2008) 306 ITR 392 (SC) deleted the said addition and treated the said subsidy as a capital receipt. Aggrieved, the revenue is in appeal before us on the following ground:- 4 ITA No.1370-1374/Kol/2010 Paharpur Cooling towers Ltd. AYs 2001-02-2005-06 “2. On the facts and circumstances of the case the Ld.CIT(A)-XXXII, Kolkata has erred in law and in facts while tre…

Krishi Rasayan Exports Pvt. Ltd., Kolkata vs. ACIT, RG-12, Kolkata

In the result, appeal by the Assessee is partly allowed and appeal by the revenue is dismissed

ITA 883/KOL/2014[2010-2011]Status: DisposedITAT Kolkata08 Mar 2017AY 2010-2011

Bench: Hon’Ble Sri N.V.Vasudevan, Jm & Dr.Arjun Lal Saini, Am]

For Appellant: Shri S.D.Verma, Advocate and Shri Sanjeev Kadel, FCAFor Respondent: None
Section 139(5)

…o the decisions of the Hon’ble Supreme Court in the case of Sahney Steel & Press Works Ltd. Etc. vs. CIT (1997) 142 CTR (SC) 261 : (1997) 228 ITR 253 (SC) and CIT vs. Ponni Sugars & Chemicals Ltd. & Ors. (2008) 219 CTR (SC) 105 : (2008) 13 DTR (SC) 1 : (2008) 306 ITR 392 (SC), held as follows: “15. After going through the two judgments, we find the ratio in Sahney Steel case (supra) and approval thereof in Ponni Sugars & Chemicals Ltd. (supra), to have been spelt out, in the following para of the judgment delivered by the Hon’ble Supreme Court of India in Ponni Sugars & Chemicals Ltd. case (supra). It reads thus…

DCIT, Cir-12, Kolkata vs. M/S Krishi Rasayan Exports Pvt. Ltd., Kolkata

In the result, appeal by the Assessee is partly allowed and appeal by the revenue is dismissed

ITA 1018/KOL/2014[2010-2011]Status: DisposedITAT Kolkata08 Mar 2017AY 2010-2011

Bench: Hon’Ble Sri N.V.Vasudevan, Jm & Dr.Arjun Lal Saini, Am]

For Appellant: Shri S.D.Verma, Advocate and Shri Sanjeev Kadel, FCAFor Respondent: None
Section 139(5)

…o the decisions of the Hon’ble Supreme Court in the case of Sahney Steel & Press Works Ltd. Etc. vs. CIT (1997) 142 CTR (SC) 261 : (1997) 228 ITR 253 (SC) and CIT vs. Ponni Sugars & Chemicals Ltd. & Ors. (2008) 219 CTR (SC) 105 : (2008) 13 DTR (SC) 1 : (2008) 306 ITR 392 (SC), held as follows: “15. After going through the two judgments, we find the ratio in Sahney Steel case (supra) and approval thereof in Ponni Sugars & Chemicals Ltd. (supra), to have been spelt out, in the following para of the judgment delivered by the Hon’ble Supreme Court of India in Ponni Sugars & Chemicals Ltd. case (supra). It reads thus…

DCIT, Circle - 1, Kolkata vs. M/S. Gloster Jute Mills Limited, Kolkata

In the result, appeal by the Revenue is dismissed

ITA 95/KOL/2011[2007-08]Status: DisposedITAT Kolkata01 Mar 2017AY 2007-08

Bench: Hon’Ble Sri N.V.Vasudevan, Jm & Shri Waseem Ahmed, Am] I.T.A No.95/Kol/2011 Assessment Year : 2007-08

For Appellant: Shri Ajay Vohra, Sr.AdvocateFor Respondent: Shri Sital Chandra Das, JCIT

…setting up of industries in West Bengal. Hence interest subsidy received under WBIS 2000 shall be treated as capital receipt. Reference was made to several other decisions of the Hon’ble Apex Court in the case of CIT -vs.- Ponni Sugars & Chemicals Ltd. (2008) 306 ITR 392(SC) wherein it has been held that it is the purpose of the incentive which decides its nature and not the modality or the source thereof. Reference was also made to the decision of Jurisdictional High Court in CIT - - Rasoi Ltd. (2011) 335 ITR 438 (Cal) wherein it has been held that subsidy received for expansion of capacities, modernization and…

DCIT, CC-VII, Kolkata vs. M/S Shyam Steel Industries Ltd., Kolkata

In the result the appeal of the revenue is dismissed

ITA 602/KOL/2014[2010-2011]Status: DisposedITAT Kolkata03 Feb 2017AY 2010-2011

Bench: Hon’Ble Sri N.V.Vasudevan, Jm & Shri Waseem Ahmed, Am ]

For Appellant: Shri Avinash Mishra, CIT(DR)For Respondent: Shri A.K.Tulsiyan, FCA

…antification thereon would be irrelevant for taxability of the same going by the objects of the incentive scheme 2000 of West Bengal Government. We also find that the Hon'ble Apex Court in the case of CIT vs Ponni Sugars & Chemicals Ltd & Ors reported in (200 306 ITR 392 (SC) had held as under:- "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. In other words, one has to apply the purpose test. The point of time at which the subsidy is paid is not relevant. The source is immaterial. If the obje…

DCIT, CC-Xxvii, Kolkata vs. M/S Budge Budge Refineries Ltd., Kolkata

In the result, Appeal filed by the Revenue is dismissed

ITA 390/KOL/2014[2011-12]Status: DisposedITAT Kolkata17 Jan 2017AY 2011-12

Bench: Shri A. T. Varkey, Jm & Dr. A. L. Saini, Am]

For Appellant: Shri G. Mallikarjuna, CIT, DRFor Respondent: Shri A. K. Tibrewal, FCA
Section 143(1)Section 143(3)Section 41(1)

…on of Hon’ble Supreme Court in the case of Sahney Steel & Press Works Ltd. the amount receivable by the appellant on account of Industrial Promotion Assistance, would be capital in nature. 5.2. In the case of CIT Vs. Ponni Sugars & Chemicals Ltd. reported in 306 ITR 392 (SC), by applying the decision in the case of Sahney Steel & Press Works Ltd., it is held by the Hon’ble Supreme Court that the character of the receipt of a subsidy in the hands of the assessee under the scheme 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. Th…

DCIT, CC-Xxvii, Kolkata vs. M/S Budge Budge Refineries Ltd., Kolkata

In the result, Appeal filed by the Revenue is dismissed

ITA 389/KOL/2014[2010-11]Status: DisposedITAT Kolkata17 Jan 2017AY 2010-11

Bench: Shri A. T. Varkey, Jm & Dr. A. L. Saini, Am]

For Appellant: Shri G. Mallikarjuna, CIT, DRFor Respondent: Shri A. K. Tibrewal, FCA
Section 143(1)Section 143(3)Section 41(1)

…on of Hon’ble Supreme Court in the case of Sahney Steel & Press Works Ltd. the amount receivable by the appellant on account of Industrial Promotion Assistance, would be capital in nature. 5.2. In the case of CIT Vs. Ponni Sugars & Chemicals Ltd. reported in 306 ITR 392 (SC), by applying the decision in the case of Sahney Steel & Press Works Ltd., it is held by the Hon’ble Supreme Court that the character of the receipt of a subsidy in the hands of the assessee under the scheme 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. Th…