Supreme Court of India
Commissioner Of Income-Tax vs Rajaram Maize Products on 23 August, 2001
Equivalent citations: AIR2002SC490, (2001)170CTR(SC)393, [2001]251ITR427(SC), (2002)9SCC713, 2002TAXLR328, [2001]119TAXMAN492(SC), AIR 2002 SUPREME COURT 490, 2002 (9) SCC 713, 2002 AIR SCW 21, 2002 TAX. L. R. 328, (2001) 119 TAXMAN 492, (2001) 251 ITR 427, (2001) 170 CURTAXREP 393, (2002) 166 TAXATION 601
Bench: S.P. Bharucha, Ashok Bhan
ORDER
1. Leave granted in the special leave petition.
2. The question that requires our consideration reads thus (see [1998] 234 ITR 667, 669) :
"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the power subsidy received by the assessee was a capital receipt, not liable to be taxed within the meaning of section 28(iv) of the Income-tax Act. 1961 ?"
3. This court in Sahney Steel and Press Works Ltd. v. CIT [1997] 228 ITR 253, has held that power subsidies are of revenue nature and have to be taxed accordingly. We also find that the terms under which the subsidy was given in the present cases clearly suggest that the subsidy was of a revenue nature inasmuch as it went towards reduction of the electricity bills.
4. Accordingly, the appeals are allowed. The orders under challenge are set aside in so far as they relate to the question quoted above. That question is answered in the negative and in favour of the Revenue.
5. No order as to costs.