LACHIT FILMS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN this reference under S. 256(1) of the INCOME TAX ACT, 1961, we are to answer the following question:

(2.) THE grant -in -aid in question is a financial aid or subsidy given by the Government of Assam with the view to encouraging the Assamese film industry. In S. 2(24) of the IT Act, it is declared that " 'income' includes" such and such which are enumerated therein. In S. 2(24), the interpretation clause, such a grant -in - aid has not been included as an income or a revenue receipt. Therefore, considering the use of the word "include" in S. 2(24), the word "income" shall be construed as comprehending not only those which S. 2(24) declares that they shall include but also such things as it signifies according to its natural import. Since S. 2(24) has not declared that such a granting - aid shall include, the word "revenue" shall be construed as comprehending what it signifies according to its natural import. In relation to business undertaking, the word "revenue" connotes incomings of the undertaking which are products of the normal working of the undertaking. The giving of financial aid or subsidy is at the discretion of the Government. The grant -in -aid in question was not a product of the normal business activities. Therefore, such a grant -in -aid is not a revenue receipt so as to form part of the total income. Accordingly, we answer the question in the negative, against the Department and in favour of the assessee -firm. No costs.