Commissioner of Income Tax, Madras v. Ponni Sugars and Chemicals Ltd.

9 SCC 337Reported decision2008#2406 most cited

What is Commissioner of Income Tax, Madras v. Ponni Sugars and Chemicals Ltd. authority for?

The classification of a government subsidy as either a revenue or capital receipt depends on its object and purpose. If the subsidy is given to enable the assessee to set up a new unit or expand an existing one, it is a capital receipt; if it is to meet recurring expenses, it is a revenue receipt.

48

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2011 to 2025.

Also referred to as

Commissioner of Income Tax v Ponni Sugars · Ponni Sugars and Chemicals Ltd · 2008 · 9 SCC 337 · subsidy classification · capital receipt · revenue receipt · object and purpose of subsidy · government grants · taxability of subsidies · income tax India · Ponni Sugars test

Sections most often in play

Section 153ASection 37(1)Section 115JSection 115JASection 115JBSection 132Section 132(4A)Section 139
Read the full judgment

Issues it is cited on

section 207section 211minimum alternate taxsection 115jascheme of arrangementsettlement applicationsection 153a(1)(a)interest free advancesadditional depreciationsection 21section 234cinterest u/s 234b

Judgments citing Commissioner of Income Tax, Madras v. Ponni Sugars and Chemicals Ltd.

Commissioner of Income Tax-I vs. Centre Pvt. Ltd

ITA/586/2013HC Delhi30 Jan 2015
Section 143(3)Section 260

…three assessment years resulting in similar disallowance. 25. In appeals before the CIT(A), the assessee inter alia, referred to judgment of Supreme Court in Commissioner of Income Tax v. Ponni Sugars and Chemicals Ltd. [(2008) 306 ITR 392 (SC) : (2008) 9 SCC 337] to hold that it is the object for which subsidy/assistance is given is what determines its nature, the form of the mechanism through which the same is granted being irrelevant. The first appellate authority found that the entertainment tax subsidy availed of by the assessee was a capital receipt since it was limited by the cost of the projec…

Commissioner of Income Tax-I vs. Bougainvillea Multiplex Entertainment Centre Pvt. Ltd

ITA-586/2013HC Delhi30 Jan 2015
Section 143(3)Section 260

…three assessment years resulting in similar disallowance. 25. In appeals before the CIT(A), the assessee inter alia, referred to judgment of Supreme Court in Commissioner of Income Tax v. Ponni Sugars and Chemicals Ltd. [(2008) 306 ITR 392 (SC) : (2008) 9 SCC 337] to hold that it is the object for which subsidy/assistance is given is what determines its nature, the form of the mechanism through which the same is granted being irrelevant. The first appellate authority found that the entertainment tax subsidy availed of by the assessee was a capital receipt since it was limited by the cost of the projec…

Commissioner of Income Tax vs. M/S Handicrafts & Handlooms Ex

The appeal is disposed of without any order as to costs

ITA - 3 / 2001HC Delhi06 Sept 2013
Section 260A

…mature and immature rubber trees. Similarly, subsidy received for producing new original films was held to be capital receipt as they were for creating or acquiring of a new asset. 8. In a subsequent decision, CIT vs. Ponni Sugars and Chemicals, [2008] 9 SCC 337 Supreme Court has lucidly explained the performance test in the following words: “The importance of the judgment of this Court in Sahney Steel case lies in the fact that it has discussed and analysed the entire case law and it has laid down the basic test to be applied in judging the character of a subsidy. That test is that the character o…

Commissioner of Income Tax vs. Corpn. of India Ltd

The appeal is disposed of without any order as to costs

ITA/3/2001HC Delhi06 Sept 2013
Section 260A

…mature and immature rubber trees. Similarly, subsidy received for producing new original films was held to be capital receipt as they were for creating or acquiring of a new asset. 8. In a subsequent decision, CIT vs. Ponni Sugars and Chemicals, [2008] 9 SCC 337 Supreme Court has lucidly explained the performance test in the following words: “The importance of the judgment of this Court in Sahney Steel case lies in the fact that it has discussed and analysed the entire case law and it has laid down the basic test to be applied in judging the character of a subsidy. That test is that the character o…

Commissioner of Income Tax-II vs. M/S The A.P.Mahesh Coop. Urban Bank Ltd

In the result, for the above reasons, these appeals fail and

ITTA/718/2006HC Telangana07 Jun 2011

Bench: V.V.S.RAO,RAMESH RANGANATHAN

Section 260ASection 46Section 80P(2)(a)

…C 2529 : (1993) 91 STC 450 (SC) 13) (1960) 39 ITR 114 (SC) : AIR 1960 SC 789 14) (1968) 70 ITR 86 (SC) 15) (1996) 218 ITR 438 (SC) : (1996) 2 SCC 541 16) (1998) 232 ITR 282 (SC) : (1998) 6 SCC 129 : AIR 1999 SC 2955 17) (2008) 306 ITR 392 (SC) : (2008) 9 SCC 337 18) (2002) 255 ITR 423 (SC) : (2009) 17 SCC 620 19) (2003) 63 ITR 63 (P&H) 20) (2010) 3 SCC 223 THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN INCOME TAX TRIBUNAL APPEAL Nos.86 of 2003 711, 715, 718 of 2006; 241, 243 of 2007; 50, 107, 149, 162, 163, 289 of 2008; 315, 392, 410, 413 of 2010; and 24 of 2011…

Commissioner of Income Tax -II vs. The Agrasen Coop. Urban Bank Ltd

In the result, for the above reasons, these appeals fail and

ITTA/711/2006HC Telangana07 Jun 2011

Bench: V.V.S.RAO,RAMESH RANGANATHAN

Section 260ASection 46Section 80P(2)(a)

…C 2529 : (1993) 91 STC 450 (SC) 13) (1960) 39 ITR 114 (SC) : AIR 1960 SC 789 14) (1968) 70 ITR 86 (SC) 15) (1996) 218 ITR 438 (SC) : (1996) 2 SCC 541 16) (1998) 232 ITR 282 (SC) : (1998) 6 SCC 129 : AIR 1999 SC 2955 17) (2008) 306 ITR 392 (SC) : (2008) 9 SCC 337 18) (2002) 255 ITR 423 (SC) : (2009) 17 SCC 620 19) (2003) 63 ITR 63 (P&H) 20) (2010) 3 SCC 223 THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN INCOME TAX TRIBUNAL APPEAL Nos.86 of 2003 711, 715, 718 of 2006; 241, 243 of 2007; 50, 107, 149, 162, 163, 289 of 2008; 315, 392, 410, 413 of 2010; and 24 of 2011…

The Commissioner of Income Tax-II vs. The Andhra Bank Employees Co.Operative Bank Limited

In the result, for the above reasons, these appeals fail and

ITTA/243/2007HC Telangana07 Jun 2011

Bench: V.V.S.RAO,RAMESH RANGANATHAN

Section 260ASection 46Section 80P(2)(a)

…C 2529 : (1993) 91 STC 450 (SC) 13) (1960) 39 ITR 114 (SC) : AIR 1960 SC 789 14) (1968) 70 ITR 86 (SC) 15) (1996) 218 ITR 438 (SC) : (1996) 2 SCC 541 16) (1998) 232 ITR 282 (SC) : (1998) 6 SCC 129 : AIR 1999 SC 2955 17) (2008) 306 ITR 392 (SC) : (2008) 9 SCC 337 18) (2002) 255 ITR 423 (SC) : (2009) 17 SCC 620 19) (2003) 63 ITR 63 (P&H) 20) (2010) 3 SCC 223 THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN INCOME TAX TRIBUNAL APPEAL Nos.86 of 2003 711, 715, 718 of 2006; 241, 243 of 2007; 50, 107, 149, 162, 163, 289 of 2008; 315, 392, 410, 413 of 2010; and 24 of 2011…

Commissioner of Income Tax-II, Hyderabad vs. M/s. The A.P.Vardhaman(Mahila)Cooperative Urban

In the result, for the above reasons, these appeals fail and

ITTA/715/2006HC Telangana07 Jun 2011

Bench: V.V.S.RAO,RAMESH RANGANATHAN

Section 260ASection 46Section 80P(2)(a)

…C 2529 : (1993) 91 STC 450 (SC) 13) (1960) 39 ITR 114 (SC) : AIR 1960 SC 789 14) (1968) 70 ITR 86 (SC) 15) (1996) 218 ITR 438 (SC) : (1996) 2 SCC 541 16) (1998) 232 ITR 282 (SC) : (1998) 6 SCC 129 : AIR 1999 SC 2955 17) (2008) 306 ITR 392 (SC) : (2008) 9 SCC 337 18) (2002) 255 ITR 423 (SC) : (2009) 17 SCC 620 19) (2003) 63 ITR 63 (P&H) 20) (2010) 3 SCC 223 THE HON’BLE SRI JUSTICE V.V.S.RAO AND THE HON’BLE SRI JUSTICE RAMESH RANGANATHAN INCOME TAX TRIBUNAL APPEAL Nos.86 of 2003 711, 715, 718 of 2006; 241, 243 of 2007; 50, 107, 149, 162, 163, 289 of 2008; 315, 392, 410, 413 of 2010; and 24 of 2011…