Home Case Index All Cases Income Tax Income Tax + SC Income Tax - 2016 (12) TMI SC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (12) TMI 507 - SC - Income TaxSubvention received - Grant-in-aid - Revenue receipt or capital receipt - amount received by the assessee on revenue account as held by HC [2013 (11) TMI 1488 - KARNATAKA HIGH COURT] - Held that:- The view expressed by this Court that unless the grant-in-aid received by an Assessee is utilized for acquisition of an asset, the same must be understood to be in the nature of a revenue receipt was held by the High Court to be a principle of law applicable to all situations. The aforesaid view tends to overlook the fact that in both Ponni Sugars (2008 (9) TMI 14 - SUPREME COURT ) and Sahney Steel (1997 (9) TMI 3 - SUPREME Court) the subsidies received were in the nature of grant-in-aid from public funds and not by way of voluntary contribution by the parent Company as in the present cases. The above apart, the voluntary payments made by the parent Company to its loss making Indian company can also be understood to be payments made in order to protect the capital investment of the Assessee Company. If that is so, we will have no hesitation to hold that the payments made to the Assessee Company by the parent Company for Assessment Years in question cannot be held to be revenue receipts. We also find such a view in a recent pronouncement in Commissioner of Income Tax versus Handicrafts and Handlooms Export Corporation of India Ltd. [2013 (9) TMI 299 - DELHI HIGH COURT] with which we are in respectful agreement. - Decided in favour of assessee.
|