1982 (7) TMI 123

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....le of import entitlements, in respect of the export of glassware carried on by it. The ITO in the income-tax proceedings has taxed the amount of Rs. 1,34,971, being the aggregate of cash assistance and the customs drawback. About this there is no dispute. Even the sale proceeds of import entitlements of Rs. 1,41,218 were initially offered by the assessee for the assessment as taxable profits and they were taxed accordingly. Only during the pendency of the appeal by the assessee before the Commissioner (Appeals), the assessee objected to the taxing of this amount. For the reasons recorded by him in his order, the Commissioner (Appeals) allowed the assessee's appeal on this ground and deleted the addition of Rs. 1,41,218 from the assessment. ....

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....), Agra Chain Mfg. Co. v. CIT [1978] 114 ITR 840 (All.), Kesoram Industries & Cotton Mills Ltd. v. CIT [1978] 115 ITR 143 (Cal.) and CIT v. Swadeshi Cotton Mills Co. Ltd. [1980] 121 ITR 747 (All.). On a careful perusal of the first-mentioned three decisions which have mainly been relied upon by the Tribunal Bombay Bench 'C' in deciding IT Appeal No. 593 (Bom.) of 1979, the learned judges of the Madras and the Calcutta High Courts were considering the question whether the capital gains arising on the sale of import entitlements were liable for taxation. In these three cases the revenue authorities had proceeded on the basis that the import entitlements were capital assets and questions were accordingly posed before the High Courts. Since the....