Consumers' Subsidy Funds as deduction u/s.37(1) and , subsidies received by textile mills from Consumers' Subsidy Fund would be revenue receipts - Income Tax - 522/CBDT

INSTRUCTION NO. 522/CBDT Dated : March 12, 1973 Section(s) Referred: 37(1) Statute: Income - Tax Act, 1961 The Board had occasion to deal with a representation from the Indian Cotton Mills Federation regarding the allowability of the contributions made by the textile mills to the Consumers' Subsidy Funds as deduction u/s.37(1) of the Income-tax Act, 1961, and also whether the subsidies paid to the mills be taxable as income. 2. Contributions made by the textile mills to the Consumers' Subsidy Funds are allowable as deduction u/s. 37(1) of the Income-tax Act, 1961, being expenditure laid out wholly and exclusively for the purposes of business. Similarly, subsidies received by textile mills from Consumers' Subsidy Fund would be revenue receipts in their hands and would be taxable as business income. 3. The above instructions may please be brought to the notice of all the officers working in your charge.