| Citation(s) |
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| 1998 SLG 318 1998 SLD 318 1998 PTD 2498 (1996) 222 ITR 245 |
Karnataka High Court
Income-tax Reference Cases Nos. 160 and 161 of 1993, decision dated: 10-01-1996
S. RAJENDRA BABU AND R. V. RAVEENDRAN, JJ
M.V. Seshachala for the Commissioner. S.S. Naganand for the Assessee S. F. Hassan, Advocate Supreme Court instructed by S. S. Hoda, Advocate-on-Record. Nemo.
Income-tax Reference Cases Nos. 160 and 161 of 1993, decision dated: 10-01-1996
S. RAJENDRA BABU AND R. V. RAVEENDRAN, JJ
M.V. Seshachala for the Commissioner. S.S. Naganand for the Assessee S. F. Hassan, Advocate Supreme Court instructed by S. S. Hoda, Advocate-on-Record. Nemo.
COMMISSIONER OF IncomE tax
VS
GOGTE MINERALS NAKULESWAR SIKDAR vs BARUN CHANDRA CHAKRAVORTY AND ANOTHER
Law: Income Tax Act, 1961
Section: 256(1)
Income-tax----Income---Capital or revenue receipt---Development grant given for acquiring new machinery and replacing old machinery---Capital receipt. ` Held, that the amount had been given by way of development grant by the MMTC for the purpose of acquiring new machinery and replacing old machinery. A specified percentage was given on the basis of the quantum of sales effected, which was only a measure adopted under the scheme to quantify the benefit. Hence, the amount was not assessable as a revenue receipt. JUDGMENT S. RAJENDRA BABU, J.---In these references arising under section 256(1) of the Income Tax Act; 1961 (for short the "Act"), the following two questions are referred for our opinion: "(1) Whether, on the facts and in the circumstances of the case the Appellate tribunal is right in law in holding that the amount received by the assessee from the MMTC cannot be considered as income of the assessee? (2) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is right in law in holding that the guarantee commission paid by the assessee is an admissible revenue expenditure?" The assessee had received development grant from Minerals and Metal Trading Corporation in a sum of Rs.19,40,656. The assessing authority took the view that under the terms of the agreement development grant is fixed at the rate of Rs.2 per ton calculated on the total quantity shipped for export of iron ore. Therefore, the grant is related to the production and sales of the assessees mining business. hence, he took the view that it is a revenue receipt and held that it was an income. The appellate authority and in the second appeal, the Tribunal took the view, that the same does not amount to income. It is clear from the statement of the case that the development grant had been received by the assessee for…
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