TMI Blog1982 (7) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... of sale of import entitlements, were (a) items of capital receipts or (b) items of casual and non-recurring nature and hence exempt from income-tax under section 10(3) of the Income-tax Act, or (c) an item of export profits or export sales eligible for rebate from income-tax under section 2(5)(a)(i) or 2(4)(a)(ii) of the Finance Act, 1966, or 1967, has been rightly rejected ? (2) Whether the sum of Rs. 99,021 for the assessment year 1966-67 and Rs. 1,71,982 for the assessment year 1967-68, have been rightly assessed as applicant's income from business ? (3) Whether, on the facts and in the circumstances, the applicant is entitled to appropriate relief on Rs. 99,021 for the assessment year 1966-67, under section 2(5)(a)(i) or (ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... products for export. The assessee claimed before the ITO in the relevant assessment proceedings that the said amounts, namely, Rs. 99,021 and Rs. 1,71,982, were capital receipts as the assessee was not a dealer in import entitlements and alternatively contended that the said receipts were exempt from the levy of income-tax under s. 10(3) of the said Act as being of a casual and non-recurring nature. The assessee claimed that, in any event, the said amounts constituted export profit eligible for rebate of tax under the aforesaid section of the Finance Act, 1966, for the assessment year 1966-67, and the aforesaid section of the Finance Act, 1967, for the assessment year 1967-68. The ITO rejected all these contentions of the assessee and inclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cl. (iv) of s. 28. The said clause read with the opening portion of s. 28 of the said Act reads as follows : " Section 28: The following income shall be chargeable to income-tax under the head ' Profits and gains of business or profession ' (iv) the value of any benefit or perquisite, whether convertible into money or not, arising from business or the exercise of a profession. " Now, in the present case, the facts found by the Tribunal clearly show and this is not disputed by either side that the import entitlements were obtained by the assessee in the course of its business, so that the value of the same constituted profits and gains of the business of the assessee within the meaning of the said term in cl. (iv) of s. 28 of the said Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e asset. Both sides proceeded on the assumption that it was a capital asset and the only question debated was whether the gain made on the sale of that asset was liable to tax as a capital gain or not. In CIT v. Swadeshi Cotton Mills Co. Ltd. [1980] 121 ITR 747 (All), the assessee manufactured cloth which was exported outside India. The assessee received import entitlements under a Cotton Textiles Import Incentives Scheme of the Government of India. Under the said Scheme, part of the import entitlement was to be utilised by the exporting mills for importing raw cotton for its own use and the balance was to be surrendered to the Textile Commissioner. In consideration of the surrender of a part of the import entitlement to the Textile Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has not been seriously urged before us that these receipts could be regarded as casual receipts. In view of what we have stated earlier, it must be held that the aforesaid receipts were revenue receipts and were not of a casual or non-recurring nature and that the same were rightly assessed as the assessee's income from business. As far as question No. 3 is concerned, it is common ground that this question is concluded against the assessee by the decision of a Division Bench of this court in Hindustan Lever Ltd. v. CIT [1980] 121 ITR 951. In the result, the questions referred to us are answered as follows : Question No. 1 : In the affirmative. Question No. 2 : In the affirmative. Question No. 3: In the negative. It is clarifie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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