Law:

Section:

Section 4 Financial assistance received by assessee under West Bengal Industrial Promotion (Assistance to Industrial Units) Government of West Bengal Scheme, 1994, was a revenue receipt chargeable to tax [In favour of revenue] [A/Y : 2001-02] Wardex Pharmaceuticals (P.) Ltd. v. Asstt. CIT [2008] 307 ITR 387(Mad.) The assessee was engaged in the business of manufacture and trading of drugs and pharmaceuticals products. While completing the assessment, the Assessing Officer added an amount being the financial assistance received under West Bengal Industrial Promotion (Assistance to Industrial Units) Government of West Bengal Scheme, 1994, as revenue receipt as against the assessee's claim that it was a capital receipt. Held that there was no provision, whatsoever in the entire scheme to suggest that the assistance would be paid with reference to investment on the fixed asset or establishment of new unit. The assistance was not conditional upon establishing of an industry in backward area or any other area within West Bengal or conditional upon commencement of project. The quantum of assistance was also not based on investment made on the capital asset. Hence, the one and only conclusion was that could be arrived at from the scheme under consideration was that the assistance given to the appellant was regarded as revenue receipt. Though the preamble to the scheme stated that the assistance was granted for extension of the capacity, modernization and improvement of the market ability, that ipso facto could not be taken in isolation de hors the provisions of the scheme for interpretation. In the above facts and circumstances of the case and in the light of the guidelines given by the Supreme Court in the case of Sahney Steel & Press Works Ltd. v. CIT [1997] 228 ITR 253, the financial assistance received by assessee was a revenue receipt chargeable to tax. Venkatanarayanan and Subbaraya Aiyar for the Appellant. JUDGMENT K. Raviraja Pandian, J. - This appeal is filed by the assessee against the order of the Income-tax Appellate Tribunal, Madras "C" Bench made in I. T. A. No. 128/Mds/2005 dated February 9, 2007. The relevant assessment year is 2001-02. The…

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