2004 (11) TMI 55

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..... Naya Cinema Gharon Ke Nirman Ko Protsahan Yojna Ke Sahayata Anudan Niyam, 1982, from the State Government was a revenue receipt, after following the judgment of the apex court in the case of Sahney Steel and Press Works Ltd. v. CIT [1997] 228 ITR 253?" With the consent of the parties, the appeal was heard finally. The issue arises out of the assessment years 1992-93 and 1993-94. The assessee is engaged in the business of exhibiting films. They claim to have received a sum of Rs. 5,86,642 and Rs. 5,13,510, respectively, by way of an entertainment subsidy pursuant to the rules framed by the State called M.P. Naye Cinema Gharon Ke Nirman Ko Protsahan Yojana Ke Sahayata Anudan Niyam, 1982 (exhibit B), for disbursement of subsidy. The quest....

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....s a capital receipt or a revenue receipt is required to be decided keeping in view the nature of subsidy received by the assessee and the scheme pursuant to which the same has been received. In other words, it was obligatory upon the taxing authorities before they record a finding one way or the other to examine the nature of subsidy, the object of the scheme pursuant to which it has been received by the assessee, etc. In the words of their Lordships of the Supreme Court in the case of Sahney Steel's case [1997] 228 ITR 253: "What is material and decisive is the character of subsidy in the hands of recipients whether revenue or capital will have to be determined having regard to the purpose for which, the subsidy is given. Moreover, if the....

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....nation of the facts in the light of the law laid down by the Supreme Court in Sahney Steel's case [1997] 228 ITR 253, we cannot uphold such finding and the view taken by the Tribunal on this issue. In our considered opinion, it is the duty of the Tribunal, being the highest Appellate Tribunal exercising the appellate jurisdiction under the Income-tax Act, to examine the issue, both of law and fact in a right perspective and in detail. It must appear from the order passed by the Tribunal that sincere efforts were made to decide the issue that fell for examination, keeping in view the law laid down by apex court in its right earnest. Mere reference to a citation in the order for recording a finding is not enough. It is never regarded as a ca....