SC Dismisses Penalty as Capital vs Revenue Receipt Issue Held Debatable

CIT Vs Gurdaspur Cooperative Sugar Mills Ltd. (Supreme Court of India) In a judgment by the Supreme Court of India, the appeals filed by the revenue under Section 260A of the Income Tax Act, 1961 were dismissed, thereby affirming the order of the Income Tax Appellate Tribunal (ITAT), Amritsar, which had set aside a penalty imposed under Section 271(1)(c). The dispute arose from the treatment of a grant-in-aid of ₹2.15 crore received by the assessee from the State Government. The assessee had classified the receipt as a capital receipt, whereas the tax authorities treated it as a revenue rece...