Answered a reference question regarding the tax treatment of a government subsidy. Relying on Supreme Court precedent, the High Court held such a subsidy is of capital nature and allowed it in the hands of the assessee.
The referred question was answered in favour of the assessee; the Reference Case was disposed of.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
HONOURABLE SRI JUSTICE B.PRAKASH RAO AND HONOURABLE SRI JUSTICE R.KANTHA RAO
Reference Case No.252 of 1996
ORDER: (per the Hon’ble Sri Justice B.Prakash Rao)
Heard both sides.
The question involved being as to the fitment to be meted out to the incentive given to the assessee, learned counsel on either side submit that the question is no longer res integra. In Commissioner of Income Tax v. Ponni Sugars and Chemicals Ltd.,[1] the Supreme Court has held that such subsidy given by the Government is capital in nature, and thus, went in favour of the assessee.
Following the same, the question referred is answered in favour of the assessee.
Accordingly, the Reference Case is disposed of.
_________________ B.PRAKASH RAO, J ________________ R.KANTHA RAO, J 02nd March, 2010
SKM
[1] (2008) 306 ITR 392 (SC)
Colour shows how this judgement treated each authority
CIT v. Ponni Sugars and Chemicals Ltd.Relied on¶5
Commissioner of Income Tax v. Ponni Sugars and Chemicals Ltd., (2008) 306 ITR 392 (SC)
B.PRAKASH RAO
R.KANTHA RAO
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
