K.M. Sugar Mills Ltd. v. Commissioner of Income-tax

373 ITR 42Supreme Court of India#9033 most cited

What is K.M. Sugar Mills Ltd. v. Commissioner of Income-tax authority for?

An assessee is entitled to claim depreciation under Section 32 if they prove ownership of the assets and that the income generated from their use is treated as business income. This applies even to assets leased out to earn income, provided the income is accepted as business income.

12

judgments rely on this decision, according to BharatTax’s citation analysis of 366,314 Indian tax judgments — from 2019 to 2025.

Also referred to as

K.M. Sugar Mills Ltd. v. Commissioner of Income-tax · Section 32 · depreciation · ownership of assets · business income · leasing of assets · taxability of lease income

Sections most often in play

Section 37(1)Section 32Section 143(3)Section 147Section 148Section 154

Issues it is cited on

construction peproject completion methodrule of consistencysection 32penalty u/s 271(1)(c)revenue expendituresection 37(1)double taxationsection 37section 154salaryincome from other sources

Judgments citing K.M. Sugar Mills Ltd. v. Commissioner of Income-tax

ITO, Ward-6(1), Mohali vs. Quarkcity India Pvt. Ltd., Mohali

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

ITA 266/CHANDI/2023[2017-18]Status: DisposedITAT Chandigarh19 Feb 2025AY 2017-18

Bench: SHRI. VIKRAM SINGH YADAV (Accountant Member), SHRI. PARESH M. JOSHI (Judicial Member)

For Appellant: Shri Vineet Thakral Advocate And Shri Raman Aggarwal, C.AFor Respondent: Smt. Kusum Bansal, CIT, DR

…it is clear that they are related to rented building and have no connection to Capital or Project Work in progress of the appellant. Income from rent Rs.3,26,09,538 is already brought to the PnL account by the appellant. In the case of K.M. Sugar Mills Ltd. (373 ITR 42, 2015) Supreme court has held that once the assessee has proved ownership of assets and income generated from use of those assets is treated as business income, the assessee was entitled to depreciation under section 32 of the Income Tax Act. The depreciation claimed against work in progress is not claimed by the appellant. As the items on which d…

ITO, Ward-6(1), Mohali vs. Quarkcity India Pvt. Ltd., Mohali

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

ITA 265/CHANDI/2023[2016-17]Status: DisposedITAT Chandigarh19 Feb 2025AY 2016-17

Bench: SHRI. VIKRAM SINGH YADAV (Accountant Member), SHRI. PARESH M. JOSHI (Judicial Member)

For Appellant: Shri Vineet Thakral Advocate And Shri Raman Aggarwal, C.AFor Respondent: Smt. Kusum Bansal, CIT, DR

…it is clear that they are related to rented building and have no connection to Capital or Project Work in progress of the appellant. Income from rent Rs.3,26,09,538 is already brought to the PnL account by the appellant. In the case of K.M. Sugar Mills Ltd. (373 ITR 42, 2015) Supreme court has held that once the assessee has proved ownership of assets and income generated from use of those assets is treated as business income, the assessee was entitled to depreciation under section 32 of the Income Tax Act. The depreciation claimed against work in progress is not claimed by the appellant. As the items on which d…

ITO, Ward-6(1), Mohali vs. Quarkcity India Pvt. Ltd., Mohali

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

ITA 264/CHANDI/2023[2015-16]Status: DisposedITAT Chandigarh19 Feb 2025AY 2015-16

Bench: SHRI. VIKRAM SINGH YADAV (Accountant Member), SHRI. PARESH M. JOSHI (Judicial Member)

For Appellant: Shri Vineet Thakral Advocate And Shri Raman Aggarwal, C.AFor Respondent: Smt. Kusum Bansal, CIT, DR

…it is clear that they are related to rented building and have no connection to Capital or Project Work in progress of the appellant. Income from rent Rs.3,26,09,538 is already brought to the PnL account by the appellant. In the case of K.M. Sugar Mills Ltd. (373 ITR 42, 2015) Supreme court has held that once the assessee has proved ownership of assets and income generated from use of those assets is treated as business income, the assessee was entitled to depreciation under section 32 of the Income Tax Act. The depreciation claimed against work in progress is not claimed by the appellant. As the items on which d…

ITO, Ward-6(1), Mohali vs. Quarkcity India Pvt. Ltd., Mohali

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

ITA 263/CHANDI/2023[2014-15]Status: DisposedITAT Chandigarh19 Feb 2025AY 2014-15

Bench: SHRI. VIKRAM SINGH YADAV (Accountant Member), SHRI. PARESH M. JOSHI (Judicial Member)

For Appellant: Shri Vineet Thakral Advocate And Shri Raman Aggarwal, C.AFor Respondent: Smt. Kusum Bansal, CIT, DR

…it is clear that they are related to rented building and have no connection to Capital or Project Work in progress of the appellant. Income from rent Rs.3,26,09,538 is already brought to the PnL account by the appellant. In the case of K.M. Sugar Mills Ltd. (373 ITR 42, 2015) Supreme court has held that once the assessee has proved ownership of assets and income generated from use of those assets is treated as business income, the assessee was entitled to depreciation under section 32 of the Income Tax Act. The depreciation claimed against work in progress is not claimed by the appellant. As the items on which d…

ITO, Ward-6(1), Mohali vs. Quarkcity India Pvt. Ltd., Mphali

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

ITA 262/CHANDI/2023[2013-14]Status: DisposedITAT Chandigarh19 Feb 2025AY 2013-14

Bench: SHRI. VIKRAM SINGH YADAV (Accountant Member), SHRI. PARESH M. JOSHI (Judicial Member)

For Appellant: Shri Vineet Thakral Advocate And Shri Raman Aggarwal, C.AFor Respondent: Smt. Kusum Bansal, CIT, DR

…it is clear that they are related to rented building and have no connection to Capital or Project Work in progress of the appellant. Income from rent Rs.3,26,09,538 is already brought to the PnL account by the appellant. In the case of K.M. Sugar Mills Ltd. (373 ITR 42, 2015) Supreme court has held that once the assessee has proved ownership of assets and income generated from use of those assets is treated as business income, the assessee was entitled to depreciation under section 32 of the Income Tax Act. The depreciation claimed against work in progress is not claimed by the appellant. As the items on which d…

ITO, Ward-6(1), Mohali vs. Quarkcity India Pvt. Ltd., Mphali

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

ITA 261/CHANDI/2023[2012-13]Status: DisposedITAT Chandigarh19 Feb 2025AY 2012-13

Bench: SHRI. VIKRAM SINGH YADAV (Accountant Member), SHRI. PARESH M. JOSHI (Judicial Member)

For Appellant: Shri Vineet Thakral Advocate And Shri Raman Aggarwal, C.AFor Respondent: Smt. Kusum Bansal, CIT, DR

…it is clear that they are related to rented building and have no connection to Capital or Project Work in progress of the appellant. Income from rent Rs.3,26,09,538 is already brought to the PnL account by the appellant. In the case of K.M. Sugar Mills Ltd. (373 ITR 42, 2015) Supreme court has held that once the assessee has proved ownership of assets and income generated from use of those assets is treated as business income, the assessee was entitled to depreciation under section 32 of the Income Tax Act. The depreciation claimed against work in progress is not claimed by the appellant. As the items on which d…

ITO, Ward-6(1), Mohali vs. Quarkcity India Pvt. Ltd., Mphali

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

ITA 260/CHANDI/2023[2011-12]Status: DisposedITAT Chandigarh19 Feb 2025AY 2011-12

Bench: SHRI. VIKRAM SINGH YADAV (Accountant Member), SHRI. PARESH M. JOSHI (Judicial Member)

For Appellant: Shri Vineet Thakral Advocate And Shri Raman Aggarwal, C.AFor Respondent: Smt. Kusum Bansal, CIT, DR

…it is clear that they are related to rented building and have no connection to Capital or Project Work in progress of the appellant. Income from rent Rs.3,26,09,538 is already brought to the PnL account by the appellant. In the case of K.M. Sugar Mills Ltd. (373 ITR 42, 2015) Supreme court has held that once the assessee has proved ownership of assets and income generated from use of those assets is treated as business income, the assessee was entitled to depreciation under section 32 of the Income Tax Act. The depreciation claimed against work in progress is not claimed by the appellant. As the items on which d…

ITO, Ward-6(1), Mohali vs. Quarkcity India Pvt. Ltd., Mphali

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

ITA 259/CHANDI/2023[2010-11]Status: DisposedITAT Chandigarh19 Feb 2025AY 2010-11

Bench: SHRI. VIKRAM SINGH YADAV (Accountant Member), SHRI. PARESH M. JOSHI (Judicial Member)

For Appellant: Shri Vineet Thakral Advocate And Shri Raman Aggarwal, C.AFor Respondent: Smt. Kusum Bansal, CIT, DR

…it is clear that they are related to rented building and have no connection to Capital or Project Work in progress of the appellant. Income from rent Rs.3,26,09,538 is already brought to the PnL account by the appellant. In the case of K.M. Sugar Mills Ltd. (373 ITR 42, 2015) Supreme court has held that once the assessee has proved ownership of assets and income generated from use of those assets is treated as business income, the assessee was entitled to depreciation under section 32 of the Income Tax Act. The depreciation claimed against work in progress is not claimed by the appellant. As the items on which d…

ITO, Ward-6(1), Mohali vs. Quarkcity India Pvt. Ltd., Mohali

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

ITA 258/CHANDI/2023[2009-10]Status: DisposedITAT Chandigarh19 Feb 2025AY 2009-10

Bench: SHRI. VIKRAM SINGH YADAV (Accountant Member), SHRI. PARESH M. JOSHI (Judicial Member)

For Appellant: Shri Vineet Thakral Advocate And Shri Raman Aggarwal, C.AFor Respondent: Smt. Kusum Bansal, CIT, DR

…it is clear that they are related to rented building and have no connection to Capital or Project Work in progress of the appellant. Income from rent Rs.3,26,09,538 is already brought to the PnL account by the appellant. In the case of K.M. Sugar Mills Ltd. (373 ITR 42, 2015) Supreme court has held that once the assessee has proved ownership of assets and income generated from use of those assets is treated as business income, the assessee was entitled to depreciation under section 32 of the Income Tax Act. The depreciation claimed against work in progress is not claimed by the appellant. As the items on which d…

ACIT 3(2)(1), Mumbai vs. M/S Mukand Sumi Metal Processing Limited, Mumbai

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

ITA 3568/MUM/2019[2013-14]Status: DisposedITAT Mumbai02 Jun 2023AY 2013-14

Bench: Shri Prashant Maharishi, Am & Ms. Kavitha Rajagopal, Jm Acit 3(2)(1) M/S. Mukand Sumi Metal Processing Mumbai Limited 3Rd Floor, Bajaj Bhawan, Vs. Jamanalal Bajaj Marg, Nariman Point, Mumbai-400 005

For Appellant: Shri Soumen Adak &For Respondent: 09.03.2023
Section 250Section 32

…n the depreciation claimed by atleast 3% and, hence, there was no loss of revenue. From the above observation, we are of the considered view that similar issue has been dealt with by the Hon'ble Apex Court in the case of K. M. Sugar Mills Ltd. vs. CIT [2015 373 ITR 42 (SC), wherein it was held that sale and leased back transaction was recognized for the purpose of claiming depreciation provided the twin condition of section 32 of the Act where the ownership and the use of the assets for business purpose was proved then the assessee was entitled to claim the depreciation. The assessee has also placed reliance…

DCIT, New Delhi vs. M/S. Sentia Power Ltd., New Delhi

In the result, ITA number 146/Del/2016 filed by the learned assessing officer for assessment year 2012 – 13 is dismissed

ITA 1461/DEL/2016[2012-13]Status: DisposedITAT Delhi21 Aug 2019AY 2012-13

Bench: Shri Bhavnesh Saini & Shri Prashant Maharishisentia Power Ltd, Vs. Ito, (Formerly Known As Indiabulls Ward-11(4), Cseb Bhiyathan Power Ltd), New Delhi M-62 & 63, 1St Floor, Connaught Place, New Delhi Pan: Aabci8901M (Appellant) (Respondent) The Deputy Commissioner Of Vs. Sentia Power Ltd, Income Tax (Formerly Known As Circle 23(2) Indiabulls Cseb Bhiyathan New Delhi Power Ltd), M-62 & 63, 1St Floor, Connaught Place, New Delhi Pan: Aabci8901M (Appellant) (Respondent)

For Appellant: Shri Ajay Wadhwa, AdvFor Respondent: Shri Arun Kumar Yadav, Sr DR

…s been allowed as revenue expenditure that much depreciation should be reversed by the assessing authority, 12. Subject to the aforesaid observations, the appeals fail and the same are dismissed." ii) K.M. Sugar Mills Ltd. v. Commissioner of Income-tax r2015] 373 ITR 42 (SC): "It is not disputed that these gas cylinders were purchased for business purpose. In fact, the plea of the assessee that since manufacturing unit had not started functioning and this necessitated the assessee to lease out these gas cylinders to the aforesaid two parties to enable it to earn some income, rather than keeping those cylinders id…

M/S. Sentia Power Ltd., New Delhi vs. ITO, New Delhi

In the result, ITA number 146/Del/2016 filed by the learned assessing officer for assessment year 2012 – 13 is dismissed

ITA 3498/DEL/2015[2011-12]Status: DisposedITAT Delhi21 Aug 2019AY 2011-12

Bench: Shri Bhavnesh Saini & Shri Prashant Maharishisentia Power Ltd, Vs. Ito, (Formerly Known As Indiabulls Ward-11(4), Cseb Bhiyathan Power Ltd), New Delhi M-62 & 63, 1St Floor, Connaught Place, New Delhi Pan: Aabci8901M (Appellant) (Respondent) The Deputy Commissioner Of Vs. Sentia Power Ltd, Income Tax (Formerly Known As Circle 23(2) Indiabulls Cseb Bhiyathan New Delhi Power Ltd), M-62 & 63, 1St Floor, Connaught Place, New Delhi Pan: Aabci8901M (Appellant) (Respondent)

For Appellant: Shri Ajay Wadhwa, AdvFor Respondent: Shri Arun Kumar Yadav, Sr DR

…s been allowed as revenue expenditure that much depreciation should be reversed by the assessing authority, 12. Subject to the aforesaid observations, the appeals fail and the same are dismissed." ii) K.M. Sugar Mills Ltd. v. Commissioner of Income-tax r2015] 373 ITR 42 (SC): "It is not disputed that these gas cylinders were purchased for business purpose. In fact, the plea of the assessee that since manufacturing unit had not started functioning and this necessitated the assessee to lease out these gas cylinders to the aforesaid two parties to enable it to earn some income, rather than keeping those cylinders id…

K.M. Sugar Mills Ltd. v. Commissioner of Income-tax (373 ITR 42) — Cited in 12 Judgments | BharatTax