TMI Blog1988 (11) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowing questions have been referred by the Income-tax Appellate Tribunal, Chandigarh "1. Whether the Tribunal has been in error in law in upholding the disallowance of proportionate expenditure relating to such business activities of the assessee (co-operative society) as are contemplated by section 80P(2)(a) of the Act ? 2. Whether, on the facts and in the circumstances of the case, the Tri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eties in the State of Punjab should purchase one share each of IFFCO, and when the society was not in a position to do so, it gave subsidy to all the societies. During the assessment year 1972-73, subsidy of Rs. 25,000 was given by MARKFED to its societies as 1/4th value of the share was desired to be remitted at the time of filing of application for issue of one share. After obtaining the applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowable. The other point which cropped up during the assessment proceedings was whether the sum of Rs. 25,000 given as subsidy by MARKFED was revenue receipt or a capital receipt. It was held up to the Tribunal that it was a revenue receipt and was considered as the income of the assessee and thus was charged to income-tax. Question No. 2 has been referred on this point. This court has to opi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view, we are of the opinion that the subsidy in this case was of capital nature and cannot be termed other than a capital receipt. The onus to prove that the amount received represented a revenue receipt was on the Department in view of the judgment of the Supreme Court in Bombay Steam Navigation Co. (1953) P. Ltd. v. CIT [1965] 56 ITR 52 and if the Department fails to discharge the onus, then th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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