Export cash assistance is taxable as revenue income under section 28(iiib), not a capital receipt.

Export cash assistance received against exports is treated by statute as business income under section 28(iiib), which expressly brings such assistance within profits and gains of business or profession. Because the provision was inserted with retrospective effect from 1 April 1967, the character of the receipt is determined by the Income-tax Act itself and it cannot be regarded as a capital receipt. The assistance was therefore taxable as a revenue receipt, and the issue was answered in favour of the Revenue.

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Issues: Whether export cash assistance received against exports constituted a capital receipt or a revenue receipt chargeable to tax in view of section 28(iiib) of the Income-tax Act, 1961.

Analysis: Clause (iiib) of section 28, inserted by the Finance Act, 1990 with retrospective effect from 1 April 1967, specifically brings cash assistance received or receivable against exports under any Government scheme within the head of profits and gains of business or profession. In light of this retrospective legislative provision, the character of export cash assistance stands determined by statute and it cannot be treated as a capital receipt.

Conclusion: The export cash assistance was held to be a revenue receipt and the question was answered in favour of the Revenue.

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