2022 (9) TMI 840

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....the assessment year 2011-2012. The appeal was admitted to decide the following substantial question of law:- "Whether the interest subsidy and excise refund would be treated as capital receipt or revenue receipt for the purpose of computation of book profit under the provision of Section 115JB of the Income-Tax Act, 1961 ?" We have heard Mr. Tilak Mitra, learned standing Counsel appearing for the appellant/revenue and Mr. R.K. Murarka, learned senior Counsel appearing for the respondent/assessee. The substantial question of law involved in this appeal is squarely covered in favour of the assessee and against the revenue in the light of the decision of the Hon'ble Supreme Court in Commissioner of Income-Tax-I, Kolhapur vs. M/s. Chaphalk....

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....2(24) of the Act, whether it can be said to form part of the book profit under Section 115 JB. The said question was answered in favour of the revenue in the following terms :- "31. In this case since we have already held that in the relevant assessment year 2010-11 the incentives "interest subsidy" and "power subsidy" is a "capital receipt" and does not fall within the definition of "income" under section 2(24) of the Income-tax Act, 1961 and when a receipt is not on in the character of income it cannot form part of the book profit under section 115JB of the Act, 1961. In the case of Apollo Tyres Ltd. (supra) the income in question was taxable but was exempt under a specific Provision of the Act as such it was to be included as a part of....