Sahney Steel and Press Works Ltd. v. CIT

228 ITR 253Supreme Court of India1997#166 most cited

What is Sahney Steel and Press Works Ltd. v. CIT authority for?

A subsidy is treated as a revenue receipt if the assessee is free to use the money in its business as it likes and is not obligated to spend it for a specific capital purpose, such as acquiring assets or repaying loans.

429

judgments rely on this decision, according to BharatTax’s citation analysis of 366,470 Indian tax judgments — from 2007 to 2026.

Also referred to as

Sahney Steel and Press Works Ltd. v. CIT · subsidy revenue receipt · capital receipt · taxability of subsidies · Section 2(24)(xviii) · Section 37(1) · purpose of subsidy · obligation to spend · income tax treatment of subsidies

Sections most often in play

Section 143(3)Section 115JBSection 14ASection 2(24)(xviii)Section 37(1)Section 32Section 43(1)Section 147

Issues it is cited on

section 2(24)(xviii)section 43(1)section 40(a)(ii)book profitsdeduction under section 80iablock of assetssection 80hhcadditional depreciationwritten down valuesection 139(5)section 80hhsection 2(24)

Judgments citing Sahney Steel and Press Works Ltd. v. CIT

D.C.I.T, Cir-2, Kolkata vs. M/S Pricewaterhouse Coopers Pvt, Kolkata

In the result, to sum up, the appeals of the revenue in ITA No

ITA 1521/KOL/2013[2003-2004]Status: DisposedITAT Kolkata13 Jul 2016AY 2003-2004

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

For Appellant: Shri K. M. Gupta, ARFor Respondent: Shri A. K. Pandey, JCIT, Sr. DR
Section 143(3)

…n for Pricewaterhouse Coopers Pvt. Ltd.. AY 2003-04 & 2005-06 business purpose is always revenue expenditure. Therefore by following the principle laid down by the Hon’ble Supreme Court in the case of Sahney Steel and Press Works Ltd vs CIT reported in (1997) 228 ITR 253 (SC) , the interest subsidy received by the assessee should also be treated as revenue receipt. 2.2. On first appeal, the ld CITA held that the interest subsidy should not be taxed as revenue receipt but the same needs to be reduced from the cost of the asset and assessee is entitled to claim reduced depreciation accordingly. Aggrieved, the asse…

Maruti Suzuki India Ltd., New Delhi vs. Addl. CIT, New Delhi

Appeal is allowed

ITA 5720/DEL/2011[2007-08]Status: DisposedITAT Delhi12 Jul 2016AY 2007-08

Bench: Shri I.C. Sudhir & Shri L.P. Sahu Assessment Year: 2007-08 Assessment Year: 2007-08 Maruti Suzuki India Ltd., Vs. Additional Cit, Plot No.1, Nelson Mandela Road, Range-6, Vasant Road, New Delhi. New Delhi. (Pan: Aaacm0829Q) (Appellant) (Respondent) Assessee By: S/Shri Ajay Vohra, Sr. Adv. Neeraj Jain, Rohit Jain, Adv. Romit Katyal & Ms. Tejasvi Jain, Cas Department By:Shri Amrendra Kumar, Cit(Dr)

For Appellant: S/Shri Ajay Vohra, Sr. Adv. NeerajFor Respondent: Shri Amrendra Kumar, CIT(DR)

…IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH “I-1” NEW DELHI) BEFORE SHRI I.C. SUDHIR AND SHRI L.P. SAHU Assessment Year: 2007-08 Assessment Year: 2007-08 Maruti Suzuki India Ltd., vs. Additional CIT, Plot No.1, Nelson Mandela Road, Range-6, Vasant Road, New Delhi. New Delhi. (PAN: AAACM0829Q) (Appellant) (Respondent) Assessee by: S/Shri Ajay Vohra, Sr. Adv. Neeraj Jain, Rohit Jain, Adv. Romit Katyal & Ms. Tejasvi Jain, CAs Department by:Shri Amrendra Kumar, CIT(DR) C O R R I G E N D U M It has come to our notice that there are few typographical mistakes in the Order dated 20.5.2016 of the ITAT, which needs…

Grabal Alok Impex Ltd, Mumbai vs. Addl CIT RG 6(3), Mumbai

In the result appeal of the assessee is allowed in part

ITA 1776/MUM/2015[2010-11]Status: DisposedITAT Mumbai08 Jul 2016AY 2010-11
For Appellant: Shri M.P.LohiaFor Respondent: Shri Mukundraj Chate
Section 115JSection 143(3)Section 92B

…tting up of the industry but after commencement of production for repayment of loan. In such situation, the amount should have been treated as revenue receipt as per judgment of the Hon‟ble Supreme Court in Sahney Steel & Press Works Ltd. & Ors. v. CIT (1997) 228 ITR 253. 5. We are unable to accept the submission. 6. The purpose of scheme under which the subsidy is given, has been discussed by the Tribunal. To sustain and prove the envisaging technology upgradation of the industry. Under the scheme, there were two options, either to reimburse the interest charged on the lending agency on purchase of technology up…

Man Industries India Ltd, Mumbai vs. ACIT (Ltu), Mumbai

In the result, all the three appeals of the assessee are allowed

ITA 6698/MUM/2014[2011-12]Status: DisposedITAT Mumbai08 Jul 2016AY 2011-12

Bench: Shri R.C. Sharma, Am & Shri Ram Lal Negi, Jm आमकय अऩीर सं./I.T.A. No.6696,6697&6698/Mum/2014 (निर्धारण वषा / Assessment Year: 2009-10 To 2011-12) M/S. Man Industries India Ltd Asstt. Commissioner Of Income 101, Man House, S.V. Road, Off. Tax-(Ltu), बिधम/ 29Th Floor, Centre No 1, World Pawan Hans, Vile Parle (West), Mumbai-400 056. Trade Centre, Vs. Cuffe Parade, Mumbai-400 005. स्थामी रेखा सं./ जीआइआय सं./ Pan/Gir No. Aaacm 2675G (अऩीराथी /Appellant) (प्रत्मथी / Respondent) : अऩीराथी की ओय से / Appellant By : Shri Jehangir D. Mistri प्रत्मथी की ओय से/Respondent By : Shri N.P.Singh Citdr

For Appellant: Shri Jehangir D. MistriFor Respondent: Shri N.P.Singh CITDR
Section 115JSection 143(3)

…dia. Ltd. Vs. ACIT exemption. In the case of the assessee the incentive so received was for setting up new industry in the earthquake prone Anjar-Kutch area of Gujarat and not a production incentive as in the case of Sahney Steel and Press Works Ltd. Vs. CIT, 228 ITR 253(SC) relied on by the learned Assessing Officer. However, the AO has declined assessee‟s claim of subsidy as a capital receipt on the plea that subsidy so received was production incentive and not a incentive for setting up new industrial unit in the notified areas. The subsidy received by the assessee is capital in nature and not income. The dist…

Man Industries India Ltd, Mumbai vs. ACIT (Ltu), Mumbai

In the result, all the three appeals of the assessee are allowed

ITA 6697/MUM/2014[2010-11]Status: DisposedITAT Mumbai08 Jul 2016AY 2010-11

Bench: Shri R.C. Sharma, Am & Shri Ram Lal Negi, Jm आमकय अऩीर सं./I.T.A. No.6696,6697&6698/Mum/2014 (निर्धारण वषा / Assessment Year: 2009-10 To 2011-12) M/S. Man Industries India Ltd Asstt. Commissioner Of Income 101, Man House, S.V. Road, Off. Tax-(Ltu), बिधम/ 29Th Floor, Centre No 1, World Pawan Hans, Vile Parle (West), Mumbai-400 056. Trade Centre, Vs. Cuffe Parade, Mumbai-400 005. स्थामी रेखा सं./ जीआइआय सं./ Pan/Gir No. Aaacm 2675G (अऩीराथी /Appellant) (प्रत्मथी / Respondent) : अऩीराथी की ओय से / Appellant By : Shri Jehangir D. Mistri प्रत्मथी की ओय से/Respondent By : Shri N.P.Singh Citdr

For Appellant: Shri Jehangir D. MistriFor Respondent: Shri N.P.Singh CITDR
Section 115JSection 143(3)

…dia. Ltd. Vs. ACIT exemption. In the case of the assessee the incentive so received was for setting up new industry in the earthquake prone Anjar-Kutch area of Gujarat and not a production incentive as in the case of Sahney Steel and Press Works Ltd. Vs. CIT, 228 ITR 253(SC) relied on by the learned Assessing Officer. However, the AO has declined assessee‟s claim of subsidy as a capital receipt on the plea that subsidy so received was production incentive and not a incentive for setting up new industrial unit in the notified areas. The subsidy received by the assessee is capital in nature and not income. The dist…

Man Industries India Ltd, Mumbai vs. ACIT (Ltu), Mumbai

In the result, all the three appeals of the assessee are allowed

ITA 6696/MUM/2014[2009-10]Status: DisposedITAT Mumbai08 Jul 2016AY 2009-10

Bench: Shri R.C. Sharma, Am & Shri Ram Lal Negi, Jm आमकय अऩीर सं./I.T.A. No.6696,6697&6698/Mum/2014 (निर्धारण वषा / Assessment Year: 2009-10 To 2011-12) M/S. Man Industries India Ltd Asstt. Commissioner Of Income 101, Man House, S.V. Road, Off. Tax-(Ltu), बिधम/ 29Th Floor, Centre No 1, World Pawan Hans, Vile Parle (West), Mumbai-400 056. Trade Centre, Vs. Cuffe Parade, Mumbai-400 005. स्थामी रेखा सं./ जीआइआय सं./ Pan/Gir No. Aaacm 2675G (अऩीराथी /Appellant) (प्रत्मथी / Respondent) : अऩीराथी की ओय से / Appellant By : Shri Jehangir D. Mistri प्रत्मथी की ओय से/Respondent By : Shri N.P.Singh Citdr

For Appellant: Shri Jehangir D. MistriFor Respondent: Shri N.P.Singh CITDR
Section 115JSection 143(3)

…dia. Ltd. Vs. ACIT exemption. In the case of the assessee the incentive so received was for setting up new industry in the earthquake prone Anjar-Kutch area of Gujarat and not a production incentive as in the case of Sahney Steel and Press Works Ltd. Vs. CIT, 228 ITR 253(SC) relied on by the learned Assessing Officer. However, the AO has declined assessee‟s claim of subsidy as a capital receipt on the plea that subsidy so received was production incentive and not a incentive for setting up new industrial unit in the notified areas. The subsidy received by the assessee is capital in nature and not income. The dist…

The State Fisheries Development Corporation Ltd., Kolkata vs. ACIT, Cir-2, Kolkata

In the result, assessee’s appeal stands partly allowed

ITA 1281/KOL/2009[2005-2006]Status: DisposedITAT Kolkata19 Apr 2016AY 2005-2006

Bench: Shri Mahavir Singh & Shri Waseem Ahmedassessment Year :2005-06

Section 143(3)

…e claim of the assessee and treated the same as revenue receipt which is liable to tax. The AO for treating the grant-in-aid as revenue in nature relied on the decision of Hon’ble Apex Court in the case of the M/s Sahney Steel & Press Works Ltd. Vs CIT (1997) 228 ITR 253 (SC) wherein it was held that Government grant in aid to meet the revenue expenses will be treated as income. The AO also found during the assessment proceedings that similar disallowance was also made in the preceeding assessment year 2003-04 on account of grant-in-aid for an ITA No.1281/Kol/2009 A.Y. 2005-06 SFDC Ltd. V. ACIT Cir-2, Kol. Page 3…

D.C.I.T, Cir-3 Kolkata, Kolkata vs. M/S Barjora Steel & Re-Rolling Mills Pvt. Ltd., Kolkata

In the result, appeal is treated as partly allowed for statistical purpose

ITA 1517/KOL/2013[2006-07]Status: DisposedITAT Kolkata06 Apr 2016AY 2006-07

Bench: Hon’Ble Sri N.V.Vasudevan, Jm & Shri Waseem Ahmed, Am] I.T.A No. 1517/Kol/2013 Assessment Year : 2006-07

For Appellant: David Z.Chowngthu, JCITFor Respondent: Shri Ashoke Mukherjee, FCA

…in it was held that subsidy received on identical facts was held to be capital subsidy. (d) It was further submitted that the reliance placed by the Ld. A.O. on the decision of the Hon’ble Supreme Court in the case of Sahney Steel & Press Works Ltd and others 228 ITR 253 (SC), to come to a conclusion that the subsidy in question was revenue subsidy chargeable to tax is not correct. The following table was given by the Assessee before CIT(A) in this regard:- Sahney Steel & Press Works Ltd Appellant company's case case i)Subsidy granted from Govt. after i) Subsidy granted from Govt. They started production. Befor…

Jindal Steel & Power Ltd., New Delhi vs. ACIT, Hisar

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

ITA 3128/DEL/2014[2008-09]Status: DisposedITAT Delhi31 Mar 2016AY 2008-09

Bench: Sh. C.M. Garg & Sh. O.P. Kant

Section 143(3)Section 263

…it/incentive was intended for the industrial and economic development of the state and therefore a capital receipt. He placed reliance on the judgment of the Apex Court in the case of VSSV Meenakshi Achi 60 ITR 253 and Sahni Steel and Press Works Ltd. vs. CIT 228 ITR 253 to submit that the character of the subsidy is to be determined having regard to the purpose and the subsidy was to help the assessee to setup a industrial unit in backward area , hence such a subsidy is to be treated as capital receipt and not revenue receipt. Further it was submitted that Special Bench of the Tribunal in the case of DCIT vs. Re…

Jindal Steel Power Ltd., New Delhi vs. CIT, Hisar

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

ITA 3283/DEL/2013[2008-09]Status: DisposedITAT Delhi31 Mar 2016AY 2008-09

Bench: Sh. C.M. Garg & Sh. O.P. Kant

Section 143(3)Section 263

…it/incentive was intended for the industrial and economic development of the state and therefore a capital receipt. He placed reliance on the judgment of the Apex Court in the case of VSSV Meenakshi Achi 60 ITR 253 and Sahni Steel and Press Works Ltd. vs. CIT 228 ITR 253 to submit that the character of the subsidy is to be determined having regard to the purpose and the subsidy was to help the assessee to setup a industrial unit in backward area , hence such a subsidy is to be treated as capital receipt and not revenue receipt. Further it was submitted that Special Bench of the Tribunal in the case of DCIT vs. Re…

Commissioner of Income Tax vs. Sri P.Sarveswara Rao

ITTA/434/2005HC Telangana14 Mar 2016

Bench: RAMESH RANGANATHAN,M.SATYANARAYANA MURTHY

Svg Fashions Ltd ( Formelry Known As Deepak Suitings Ltd), Mumbai vs. DCIT 4(3), Mumbai

In the result, the appeal filed by the assessee stands allowed

ITA 4154/MUM/2012[2009-10]Status: DisposedITAT Mumbai23 Dec 2015AY 2009-10

Bench: Shri R.C.Sharma, Am & Shri Sandeep Gosain, Jm आमकय अऩीर सं./Ita No.5644/Mum/2011

For Appellant: Shri Hariom TulsyanFor Respondent: Shri Ranjeesh K. Arvind
Section 143(3)

…asserted that the subsidy which was not granted to supplement the profit of the unit should be treated as capital receipt and not liable to tax as revenue receipt. 7. Ld. AR placed reliance on the decision of Hon‟ble Supreme Court in the case of Sahney Steel, 228 ITR 253 in support of the proposition that if any subsidy is given, the character of the subsidy in the hands of the recipient-whether revenue or capital-will have to be determined by having regard to the purpose for which the subsidy is given. If it is given by way of assistance to the assessee in carrying on of his trade or business, it has to be treat…

Svg Fashions Ltd (Formelry Knwon As Deepak Suitings Ltd), Mumbai vs. DCIT 4(3), Mumbai

In the result, the appeal filed by the assessee stands allowed

ITA 296/MUM/2012[2008-09]Status: DisposedITAT Mumbai23 Dec 2015AY 2008-09

Bench: Shri R.C.Sharma, Am & Shri Sandeep Gosain, Jm आमकय अऩीर सं./Ita No.5644/Mum/2011

For Appellant: Shri Hariom TulsyanFor Respondent: Shri Ranjeesh K. Arvind
Section 143(3)

…asserted that the subsidy which was not granted to supplement the profit of the unit should be treated as capital receipt and not liable to tax as revenue receipt. 7. Ld. AR placed reliance on the decision of Hon‟ble Supreme Court in the case of Sahney Steel, 228 ITR 253 in support of the proposition that if any subsidy is given, the character of the subsidy in the hands of the recipient-whether revenue or capital-will have to be determined by having regard to the purpose for which the subsidy is given. If it is given by way of assistance to the assessee in carrying on of his trade or business, it has to be treat…

Svg Fashions Ltd (Formerly Known As Deepak Suitings Ltd), Mumbai vs. DCIT 4(3), Mumbai

In the result, the appeal filed by the assessee stands allowed

ITA 5644/MUM/2011[2005-06]Status: DisposedITAT Mumbai23 Dec 2015AY 2005-06

Bench: Shri R.C.Sharma, Am & Shri Sandeep Gosain, Jm आमकय अऩीर सं./Ita No.5644/Mum/2011

For Appellant: Shri Hariom TulsyanFor Respondent: Shri Ranjeesh K. Arvind
Section 143(3)

…asserted that the subsidy which was not granted to supplement the profit of the unit should be treated as capital receipt and not liable to tax as revenue receipt. 7. Ld. AR placed reliance on the decision of Hon‟ble Supreme Court in the case of Sahney Steel, 228 ITR 253 in support of the proposition that if any subsidy is given, the character of the subsidy in the hands of the recipient-whether revenue or capital-will have to be determined by having regard to the purpose for which the subsidy is given. If it is given by way of assistance to the assessee in carrying on of his trade or business, it has to be treat…

Addl CIT RG 1, Mumbai vs. Indian Petrochemicals Corporation Ltd ( Now Merged With Reliance Indl. Ltd), Baroda

In the result, the appeal filed by the assessee for the assessment year 2005-06 is allowed and both the appeals filed by the Revenue are dismissed

ITA 3921/MUM/2009[2005-06]Status: DisposedITAT Mumbai18 Nov 2015AY 2005-06

Bench: S/Shri B.R.Baskaran (Am) & Ramlal Negi, (Jm) आमकय अऩीर सं./I.T.A. No.1426/Ahd/2009 (ननधधायण वषा / Assessment Year :2005-06) बनाम/ Indian Petrochemicals Corp.Ltd., The Addl. Commissioner Of Income (Now Merged With Reliance Tax, Range 1, Vs. Industries Ltd) Baroda, P O Petrochemicals, Gujarat Dist-Vadodara -391346 (अऩीरधथी /Appellant) (प्रत्मथी / Respondent) ..

…f Rs.60,65,07,100/- on account of sales tax exemption granted by the Government of Gujarat and the assessee treated it as capital receipt. The AO, by following the decision of the Hon’ble Supreme Court in the chase of Sahney Steels and Press Works reported in 228 ITR 253(SC), treated it as revenue receipt and added the same to the total income of the assessee. 19. Before the ld.CIT(A), the assessee submitted that an identical issued had been before the Ahmedabad Bench of Tribunal in ITA No.3896/Ahd/2003, 437/Ahd/2007 and 3054/Ahd/2007 (AYs 2000-01 to 2002-03) in which the ld.CIT(A) held that the amount received b…

ACIT, Haridwar vs. M/S. Kirby Building Systems India (Uttaranchal) Pvt. Ltd., Haridwar

Appeal stands dismissed and the assessee’s cross objection stands allowed

ITA 923/DEL/2012[2008-09]Status: DisposedITAT Delhi21 Oct 2015AY 2008-09

Bench: Shri N.K. Saini & Smt. Beena Pillai

Section 80I

…in (2009) 319 ITR 208, held that the nature of a subsidy in each case, is separate and distinct and, therefore, the nature of subsidy has to be examined in each case independently. Hon’ble Supreme Court held as under; “Sahney Steel and Press Works Ltd. [1997] 228 ITR 253 (SC) was a case which dealt with production subsidy, Ponni Sugars and Chemicals Ltd. [2008] 306 ITR 392 (SC) dealt with subsidy linked to loan repayment whereas the present case deals with a subsidy for setting up an industry in the backward area. Therefore, in each case, one has to examine the nature of the subsidy. The judgment of this court in…

ACIT, Haridwar vs. M/S. Kirby Building Systems India (Uttaranchal) Pvt. Ltd., Haridwar

Appeal stands dismissed and the assessee’s cross objection stands allowed

ITA 5607/DEL/2012[2009-10]Status: DisposedITAT Delhi21 Oct 2015AY 2009-10

Bench: Shri N.K. Saini & Smt. Beena Pillai

Section 80I

…in (2009) 319 ITR 208, held that the nature of a subsidy ineach case, is separate and distinct and, therefore, the nature of subsidy has to be examined in each case independently. Hon’ble Supreme Court held as under; “Sahney Steel and Press Works Ltd. [1997] 228 ITR 253 (SC) was a case which dealt with production subsidy, Ponni Sugars and Chemicals Ltd. [2008] 306 ITR 392 (SC) dealt with subsidy linked to loan repayment whereas the present case deals with a subsidy for setting up an industry in the backward area. Therefore, in each case, one has to examine the nature of the subsidy. The judgment of this court in…

Wardex Pharmaceuticals Pvt Ltd., Chennai vs. ACIT, Chennai

In the result, the appeals of the assessee in ITA Nos

ITA 3117/CHNY/2014[2008-09]Status: DisposedITAT Chennai25 Jun 2015AY 2008-09

Bench: Shri Chandra Poojari & Shri Challa Nagendra Prasadआयकर अपील सं./ I.T.A. Nos.3116 & 3117/Mds/2014 ("नधा"रण वष" / Assessment Years : 2007-2008 & 2008-2009)

For Appellant: Shri. J. Chandrasekaran, C.AFor Respondent: Shri. N. Madhavan, IRS, JCIT
Section 5

…rom the Government of West Bengal as revenue receipt by following the earlier year order of the Tribunal in assessee’s own case dated 28.09.2009 in ITA No.366/Mds/2009 and the judgment of Supreme Court in the case of Sahney Steel and Pres Works Ltd vs. CIT, 228 ITR 253(SC). Aggrieved, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals). 3. On appeal, the Commissioner of Income Tax (Appeals) confirmed the order of the Assessing Officer. Against this, the assessee is in appeal before us. 4. There was a delay of 201 days in filing of appeals before the Tribunal. The assessee file…

Wardex Pharmaceuticals Pvt Ltd., Chennai vs. ACIT, Chennai

In the result, the appeals of the assessee in ITA Nos

ITA 3116/CHNY/2014[2007-08]Status: DisposedITAT Chennai25 Jun 2015AY 2007-08

Bench: Shri Chandra Poojari & Shri Challa Nagendra Prasadआयकर अपील सं./ I.T.A. Nos.3116 & 3117/Mds/2014 ("नधा"रण वष" / Assessment Years : 2007-2008 & 2008-2009)

For Appellant: Shri. J. Chandrasekaran, C.AFor Respondent: Shri. N. Madhavan, IRS, JCIT
Section 5

…rom the Government of West Bengal as revenue receipt by following the earlier year order of the Tribunal in assessee’s own case dated 28.09.2009 in ITA No.366/Mds/2009 and the judgment of Supreme Court in the case of Sahney Steel and Pres Works Ltd vs. CIT, 228 ITR 253(SC). Aggrieved, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals). 3. On appeal, the Commissioner of Income Tax (Appeals) confirmed the order of the Assessing Officer. Against this, the assessee is in appeal before us. 4. There was a delay of 201 days in filing of appeals before the Tribunal. The assessee file…

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

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

…s credited by the co. in its books of accounts as income. However, while filing the return of income, the same has been claimed to be exempt in accordance with the decision of Hon'ble Supreme Court in the cases of Sahney Steel and Press Works Ltd. us. CIT 228 ITR 253 wherein the Hon'ble SC has held that the character of receipt of a subsidy in the hands of the recipient would depend upon the purpose for which the subsidy has been granted. In case the subsidy has been granted for the purpose of setting up a business, the same would constitute a project subsidy and be capital receipt in the hands of the r…