1988 (11) TMI 48

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... of the court was delivered by GOKAL CHAND MITAL J. -The following questions have been referred by the Income-tax Appellate Tribunal, Chandigarh "1. Whether the Tribunal has been in error in law in upholding the disallowance of proportionate expenditure relating to such business activities of the assessee (co-operative society) as are contemplated by section 80P(2)(a) of the Act ? 2. Whet....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....s Rs. one lakh. MARKFED desired that such like co-operative societies in the State of Punjab should purchase one share each of IFFCO, and when the society was not in a position to do so, it gave subsidy to all the societies. During the assessment year 1972-73, subsidy of Rs. 25,000 was given by MARKFED to its societies as 1/4th value of the share was desired to be remitted at the time of filing of....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....[1981] 128 ITR 189 (P & H) and hold that the entire expenses are allowable. The other point which cropped up during the assessment proceedings was whether the sum of Rs. 25,000 given as subsidy by MARKFED was revenue receipt or a capital receipt. It was held up to the Tribunal that it was a revenue receipt and was considered as the income of the assessee and thus was charged to income-tax. Ques....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ipt, if not, then it would be a capital receipt. Keeping this test in view, we are of the opinion that the subsidy in this case was of capital nature and cannot be termed other than a capital receipt. The onus to prove that the amount received represented a revenue receipt was on the Department in view of the judgment of the Supreme Court in Bombay Steam Navigation Co. (1953) P. Ltd. v. CIT [1965]....