2014 (1) TMI 1239

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....interpretation of charging section 4 read with section 28 of the Act, the Tribunal was legally correct in holding that the sum of Rs.9,98,966/- as had been received by the assessee by way of "grain-in-aid" out of Sugar Development Fund, from Government of India, was in the nature of revenue receipt liable for taxation?" The aforesaid question is common in all these appeals which relate to different Assessment Year. It is sufficient to refer to the case of Appeal No.215 of 2005 for deciding all the appeals. The appeal has been filed under Section 260-A of the Income Tax Act, 1961 against the order of the Tribunal dated 31/1/2005. The assessee in the relevant assessment year has claimed deduction of Rs.9,98,966/- on account of Buffer Stock....

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....cessor in office decided this issue against the appellant in view of the following reasons: "This was an amount of subsidy granted for holding buffer stock by the appellant and to meet expenditure incurred to hold on the buffer stock as required. Since the appellant would have obviously debited all expenses relatable to maintaining the buffer stock the subsidy received will not be covered by the ration of P.J. Chemicals and will only be a revenue receipt. Therefore, the Assessing Officer was correct in treating this as revenue income." The assessees's appeal filed before the tribunal also went to the same fate, against which the present appeals have been filed. Shri Dhananjay Awasthi, learned counsel appearing for the revenue at th....

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....he capital investment calculated on the basis of the quantum of investment in capital and, therefore, receipt of such subsidy was on capital account and not on revenue account. It was also urged in that case that subsidy granted on the basis of refund of sales tax on raw materials, machinery and finished goods were also of capital nature as the object of granting refund of sales tax was that the assessee could set up new business or expand his existing business. The contention of the assessee in that case was dismissed by the Tribunal and, therefore, the assessee had come to this Court by way of a special leave petition. It was held by this Court on the facts of that case and on the basis of the analyses of the Scheme therein that the subsi....