TMI Blog1998 (3) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the circumstances of the case, the Tribunal was justified in holding that the subsidy of Rs. 2,85,923 received from the Indian Cotton Mills Federation was in the nature of voluntary and gratuitous payment and not liable to tax?" The assessee is a registered firm carrying on the business of manufacture and export of hosiery goods and also commission business in several commodities. The asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luntary act by the Federation for no services rendered by the assessee to the Federation. Subsidy is nothing but donations or gifts and the same cannot be said to be income taxable under section 28 of the Act. Therefore, the addition made by the Income-tax Officer was deleted. In appeal before the Tribunal, the Tribunal also found the fact that the amount of Rs. 2,85,923 was received by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Mitra, submits that the amount received by the assessee from the Federation is a subsidy which is taxable under the Act. He further submits that the amount distributed by the Federation is money received from the Government of India. Learned counsel for the assessee, Dr. Pal, submits that after the insertion of clause (iiib) in section 28 of the Act, the controversy has been put an end. Any s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxed as income, and he failed to show us any provision in the Act nor has he been able to show any authority where any such type of receipt has been shown liable to tax as income. Considering the submissions of learned counsel for the parties, the undisputed facts remain that the amount of Rs. 2,95,923 was received by the assessee from the Federation as cash assistance, which is a private body ..... X X X X Extracts X X X X X X X X Extracts X X X X
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