Case Law Details
Case Name : Commissioner of Income Tax-I Vs Airline Allied Services Ltd. (Delhi High Court)
Related Assessment Year :
Courts :
All High Courts Delhi High Court
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The Assessing Officer had noticed that grant of Rs. 35 crores was sanctioned by the Government in the said year to improve air connectivity in North-Eastern Region. The respondent- assessee had taken on lease four ATR-42-320 air crafts for five years from Ms/ Aviande Transport Regional (ATR).3 The respondent- assessee had authorized and had spread this grant over a period of five years as the lease period of the air crafts was sixty months. The Assessing Officer disagreed and held that once the respondent- assessee had received
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Receipts like subsidies, gransts, donations,prizes, scholarships,etc. are not received as a consideration or reward or remuneration.
These are paid by payer as a promotional effort to achieve particular objective which is generally a public purpose.
Such receipts are threfore, capital receipts. Even a capital receipt which is connected with business or profession is not income. Tax on income cannot be imposed on such capital receipts.
Government subsidies sholuld be specificaly considered as ‘capital receipts’.There is no purpsoe if government gives Rs.100 as a subsidy or incentive and take back Rs.34 as income-tax thereson.
On such issues there should be clarity and any dispute should not be allowed. This will save lot of time of our courts and national resources. Though I will be adverserly affected by such clear policy (no dispute mens no professional assignment and no fee for me)however, in interest of nation,and to avoid brain drain, I would like that situation and will try to findout other productive work.