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Section 4 of the Income-tax Act, 1961 - Income - Chargeable as - Assessment year 1974-75 - Whether rubber replantation subsidy is not revenue receipt assessable as income - Held, yes Section 147(b) of the Income-tax Act, 1961 - Income escaping assessment - Position prior to 1-4-1989 - Assessment year 1974-75 -In original assessment rubber replantation subsidy was not treated as income - In reassessment, subsidy amount was included in income of assessee - Tribunal held that rubber replantation subsidy was not assessable as income - Whether in view of decision on merit, question whether reassessment was valid, became academic and needed not be answered - Held, yes FACTS The assessee received rubber replantation subsidy. In the original assessment, this was not treated as the income of the assessee. The assessment was reopened under section 147(b), being alerted by an audit rate. In the reassessment, the subsidy amount was included in the income of the assessee and was brought to tax. In appeal, the Commissioner (Appeals) held that the reopening of the assessment was bad. He also held that the subsidy amount received was only agricultural income and that it could not be brought to tax under the Act. The Tribunal confirmed the findings of the Commissioner. On reference : HELD In view of Full Bench decision in CIT v. Ruby Rubber Works Ltd. [1989] 178 ITR 181 (Ker.), it was to be held that the rubber replantation subsidy received by the assessee could not be called a revenue receipt assessable as income. In the light of the above answer, it was purely academic to give an answer on question as to whether the reopening of the assessment under section 147(b) was valid. Note: The case was decided in favour of the assessee. CASE REVIEW CIT v. Ruby Rubber Works Ltd. [1989] 178 ITR 181 (Ker.) [FB] followed & relied upon. CASES REFERRED TO Indian & Eastern Newspaper Society v. CIT [1979] 119 ITR 996 (SC) and CIT v. Ruby Rubber Works Ltd. [1989] 178 ITR 181 (Ker.) (FB). P.K.R. Menon for the Applicant. C.N. Ramachandran Nair for the Respondent. JUDGMENT K.S. Paripoornan, J.-At the instance of the Revenue, the Income-tax Appellate Tribunal has referred the following two…

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