COMMISSIONER OF INCOME TAX Vs. FAKIRCHAND DAYARAM

JUDGEMENT

(1.) THIS is an application under Section 256 (2) of the IT Act, against the order of the Tribunal, dt. 15th Sept. , 1995, whereby the Tribunal refused to make a reference of the question of law to this Court for being answered by it.

(2.) LEARNED counsel appearing for parties submitted that the matter projected in this reference is covered by a judgment of this Court passed on dt. 14th April, 2003, CIT v. Ajanta Talkies, in IT Ref. No. 100 of 1998. Copy of the order has been produced before us. In this case also the question was with regard to receipt of subsidy by the assessee which could be treated as capital receipt.

(3.) THIS Bench in the matter of Ajanta Talkies (supra) after placing reliance on a judgment of the Supreme Court reported as CIT v. Rajaram (2001) 251 ITR 427 (SC) held that subsidies are in the nature of revenue receipts and are liable to be taxed and they are to be added in the income while calculating total income. Thus, this reference is also answered accordingly, in favour of the Revenue and against the assessee.