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Section 2(24) of the Income-tax Act, 1961 - Income - Chargeable as - Assessee-firm, a producer of films, produced an Assamese film, on which it received certain amount from State Government as grant-in-aid - Whether aforesaid grant-in-aid received by assessee was 'income' within meaning of section 2(24) and, thus, was assessable in its hands - Held, no FACTS The assessee-firm was a producer of films and had produced an Assamese film. During the relevant accounting year, certain amount was received by the assessee as grant-in-aid from the State Government. The assessee claimed that the aforesaid grant-in-aid was not a revenue receipt assessable in its hands. The ITO disallowed the assessee's claim and assessed it as its income. On appeal, the Tribunal held that the grant-in-aid was a revenue receipt assessable in the hands of the assessee. On reference : HELD In section 2(24 ) it is declared that 'income' includes such and such items which are enumerated therein, but such a grant-in-aid has not been included therein as an income or a revenue receipt Considering the use of the word 'include' in section 2(24), the word 'income' shall be construed as comprehending not only those things which section 2(24) declared that they shall be included but also such things as it signifies according to its natural import. In relation to a business undertaking, the word 'revenue' connotes incomings of the undertaking which are products of the normal working of the undertaking. The giving of financial aid or subsidy is at the discretion of the Government. The grant-in-aid in question was not a product of the normal business activities. Therefore, such a grant-in-aid was not a revenue receipt so as to form part of the total income. The Tribunal was, therefore, not justified in holding that aforesaid grant-in-aid received by the assessee was assessable in its hands as its income. G.K. Joshi and R.K. Joshi for the Applicant. G.K. Talukdar and D.K. Talukdar for the Respondent. JUDGMENT Manisana, J.-In this reference under section 256(1) of the Income-tax Act, 1961 ('the Act') we are to answer the following question: "Whether, under the facts and in the circumstances of the case, the…

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