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2012 (4) TMI 614 - AT - Income TaxGrant-in-aid - nature of income - Held that:- The use of the word "include" in section 2(24), the word "income" shall be construed as comprehending not only those items which said section declares that these shall include but also such items as it signifies according to its natural import. Since section 2(24) has not declared that such a grant-in-aid shall be included in the income, the word "revenue" shall be construed as comprehending what it signifies according to its natural import. In relation to a business undertaking, the word "revenue" connotes incomings of the undertaking which are products of the normal working of the undertaking. The giving of financial aid or subsidy to the aforesaid committee, which admittedly is not carrying on any business, is at the discretion of the Government or Sugar factories. Thus, the grant-in-aid in question was not a product of the normal business activities of the assessee committee, assessed by the AO as a local authority. Therefore, such a grant-in-aid could not be termed as a revenue receipt so as to form part of the total income. As already pointed out, the ld. CIT(A) concluded that the aforesaid funds received by the assessee from State Government and sugar factories have been spent only for those specific projects and there was no surplus with the assessee.
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