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2024 (2) TMI 407 - SCH - Income TaxCharacterization of receipt - sales tax subsidy - whether has to be treated as a capital receipt and not to be added as part of the income of the assessee? - As petitioner contended that although these special leave petitions may be disposed of in terms of the order passed by this Court while sustaining the order passed in the aforesaid case of M/s Munjal Auto Industries Limited [2018 (5) TMI 1738 - SC ORDER] had also taken note of the fact that, if, the sales tax subsidy is held to be a capital receipt then the natural consequences of the said fact should follow. Our attention was drawn order in the case of M/s Munjal Auto Industries Limited[2013 (10) TMI 650 - GUJARAT HIGH COURT] which order was sustained by this Court [2018 (5) TMI 1738 - SC ORDER] by placing reliance on another judgment of this Court in M/s Chaphalkar Brothers, Pune [2017 (12) TMI 816 - SUPREME COURT]. Therefore, the said direction may also be issued in the instant special leave petitions also. Assessee drew our attention to another judgment of Gujarat High Court in the case of Commissioner of Income Tax Central-II vs. Ellora Time Private Limited[2011 (6) TMI 853 - GUJARAT HIGH COURT] which order was also sustained by this Court in Ajanta Limited [2016 (4) TMI 1460 - SC ORDER] wherein on an identical question no such consequential direction was issued inasmuch as the special leave petitions were simply dismissed. HELD THAT:- Having noted the submissions at the Bar, we are conscious of the fact that this Court while dismissing the Civil Appeal which arose in the case of M/s Munjal Auto Industries Limited has sustained the judgment of the Gujarat High Court passed in the said case. In the circumstances, we find that the observations of the Gujarat High Court would have a bearing on the present case and therefore, we observe that consequent upon holding that the sales tax subsidy receipt by the respondent-assessee being treated as a capital receipt, the natural consequences as a result of the said declaration would follow. The special leave petitions are disposed of in the aforesaid terms. Pending application(s), if any, shall stand disposed of. Application u/s 264 - treatment to sales tax subsidy - HELD THAT:- Following the order passed in SLP(C) [supra] this Civil Appeal is also dismissed subject to the observations made in the aforesaid Special leave petitions.
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