Commissioner Of Income-Tax vs Ruby Rubber Works Ltd., Travancore ... on 6 April, 1989
9. The Supreme Court in SAHNEY STEEL & PRESS WORKS LTD. v.
C.I.T. (228 ITR 253) has quoted with approval the decision of the Kerala High
Court in C.I.T. v. RUBY RUBBER WORKS LTD. (178 ITR 181). We are of the
view that the ratio of the decision of the Supreme Court does apply as the
grant was made under a beneficial and benevolent scheme for the welfare and
upliftment of weaker sections of the society and the scheme was framed on
benevolent consideration with a view to benefit Adi Dravida community people
in securing employment. We hold that the amount received by the assessee has
nothing to do with the trade or business of the assessee. It is not a
reimbursement of salary; it is not made for the normal working of the mill; it
is not made for the benefit of the assessee, but paid with a social objective
in mind to achieve a social purpose of providing employment to socially
depressed class of people to enable them to get employment with a decent
salary affording them some security in life to lead a normal and decent life.
The Appellate Tribunal was therefore correct in holding that the amount
received by way of subsidy under the scheme was capital in nature.