COMMISSIONER OF INCOME TAX Vs. SABOO EMERY STONES

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, at the instance of the Revenue, has referred the following question of law under Section 256(1) of the Income-tax Act, 1961, for the opinion of this court :

(2.) THE controversy in the present case is : whether the cash compensatory receipt is taxable as a revenue receipt or not? Section 28 of the Act deals with the profits and gains from business or profession. An amendment was made by the Finance Act of 1990, with retrospective effect from April 1, 1962, regarding taxability of the incentive received by the exporters and new Clauses (iiia), (iiib) and (iiic) have been inserted in Section 28 of the Act, by which a provision has been made that profit on sale of a licence granted under the Imports (Control) Order, 1955, or made under the Imports and Exports (Control) Act, 1947, cash assistance (by whatever name called) received or receivable by any person against exports under any scheme of the Government of India and any duty of customs or excise repaid or repayable as drawback to any person against exports under the Customs and Central Excise Duty Drawback Rules, 1971, shall be chargeable to income-tax under the head "Profits and gains of business or profession". THEse income have, also, by way of amendment in Section 2(24) been included as "income" by adding Sub-clauses (va), (vb) and (vc). THE income from the cash receipts has been made chargeable under Section 2(24)(vb) and Section 28(iiib) of the Act. THEse sections have been amended with retrospective effect from the date from which these incentives were introduced. In view of the amended provisions of Section 2(24)(va), (vb) and (vc) and Section 28(iiia), (iiib) and (iiic) of the Act relating to exemption and charging of income from exports, by which these incomes have been made chargeable under the Act, the reference is answered in favour of the Revenue and against the assessee.