2004 (4) TMI 46

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....,19,399 received by the assessee towards entertainment subsidy cannot be regarded as a revenue receipt in the light of a decision rendered by the Supreme Court in the case of Sahney Steel and Press Works Ltd. v. CIT [1997] 228 ITR 253? (2) Whether, in the absence of any detailed discussion/examination of nature of subsidy received by the assessee by way of entertainment subsidy, could the Tribunal record a finding against the assessee, by merely relying upon the law laid down by the Supreme Court in 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 year 1994-95. The assessee is engaged in the business of exhibiting the ....

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.... Having heard learned counsel for the parties and having perused the record of the case, we are not satisfied with the way the Tribunal has decided this issue. The question whether a particular subsidy is 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 is 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 ma....

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....bunal did not even take care to read much less examine the scheme (exhibit PI) pursuant to which the assessee claimed to have received the subsidy amount. In our opinion, in the absence of any examination of the facts in the light of the law laid down by the Supreme Court in Sahney'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 the 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 fo....