Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2020 (3) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (3) TMI 791 - HC - Income TaxCharacterization of income - cash receipt due to waiver of loan by the state government - whether in the nature of subsidy - to be treated as benefit/ perquisite u/s 28(iv) or not - Income chargeable to income tax under the head “profits and gains of business and profession” - value of any benefit or perquisite has to arise from business or the exercise of a profession and it should not be in cash - provisions of Section 28(iv) of the Act as attracted where alleged benefit or perquisite is other than cash - HELD THAT:- From a careful analysis, it is evident that there is a fundamental difference between “loan” and “subsidy” and the two concepts cannot be equated. While “loan” is a borrowing of money required to the repaid back with interest; “subsidy” is not required to be repaid back being a grant. Such grant is given as part of a public policy by the state in furtherance of public interest. Therefore, even if a “loan” is written off or waived, which can be for various reasons, it cannot partake the character of a “subsidy”. From the discussions and reasons aforementioned, we find sufficient force in the contention of the appellant. The substantial question of law therefore is answered in favour of the assessee by holding that waiver of loan cannot be brought to tax under Section 28(iv) of the Act.
|