Rubber replanting subsidy treated as non-taxable receipt, with taxability decided in favour of the assessee.

Rubber replanting subsidy was held not to be a revenue receipt and therefore not assessable as income under the Income-tax Act. The analysis applied the Full Bench view that such replantation subsidy cannot be characterised as taxable revenue receipt. On that basis, the substantive taxability issue was resolved in favour of the assessee, and the subsidy was treated as outside the charge to tax.

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Issues: Whether rubber replanting subsidy received by the assessee was a revenue receipt chargeable to tax under the Income-tax Act.

Analysis: The question was answered in the light of the Full Bench decision holding that rubber replantation subsidy cannot be regarded as a revenue receipt assessable as income. As the subsidy was treated as not exigible to tax, the substantive taxability issue stood concluded in favour of the assessee.

Conclusion: Rubber replanting subsidy is not assessable to tax and the answer is in favour of the assessee.

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