Commissioner of Income Tax Vs. Ajanta Talkies - Court Judgment |
| Other Taxes |
| Madhya Pradesh High Court |
| Apr-14-2003 |
| IT Ref. No. 100 of 1998 |
| Deepak Verma and ;S.K. Seth, JJ. |
| (2004)190CTR(MP)280 |
| Income Tax Act, 1961 - Sections 4 |
| Commissioner of Income Tax |
| Ajanta Talkies |
| R.L. Jain, Adv. |
| None |
- section 2(f): [dipak misra, k.k. lahoti & rajendra menon, jj] service tax - packaging and bottling of liquor whether amounts to manufacture within meaning of section 2(f) of central excise act 1944? finance act 932 of 1994), section 65 (76 b) (as amended on 16.6.2005) - held, the first limb of the inclusive definition of the manufacture under section 2(f) of central excise act has a very wide connotation. as the definition clause lays down an inclusive facet, the term manufacture has to be construed in a natural and plain manner and would include any process incidental or ancillary to the completion of a manufactured product. keeping in view the context in which the term manufacture has been used, it would take in its fold incidental and ancillary process in the manufacture or finishing of any manufactured product. it does not leave any room for doubt that an allied process should be integral and inextricable part of manufacture of completeness and presentability of the manufactured product. section 65(76b) of finance act used the words but it does not include. thus it is a definition which has the inclusive as well as exclusive facet. by virtue of the same it may include..........of the it act of revenue with a request to this court to answer the following question of law referred by tribunal. the same is reproduced herein :'whether, on the facts and in the circumstances of the case, tribunal was justified in law in holding that the assessee was correct in claiming entertainment tax subsidy as capital receipt ?'2. learned counsel for the applicant/revenue submitted that this question has been answered by the judgment of the supreme court in cit v. rajaram maize products : [2001]251itr427(sc) . in fact, the aforesaid judgment is based on earlier judgment of the supreme court in sahney steel & press works ltd. and anr. v. ctt : 1997ecr787(sc) in which it has been held that subsidies are revenue receipts and have to be taxed, accordingly.3. in the present case, the assessee had received entertainment tax subsidy. thus, on applying aforesaid ratio of the supreme court as mentioned above in two cases, we hold that it will be a revenue receipt and not capital in the hands of the assessee. thus, we answer the question in favour of the revenue and against the assessee. accordingly, this matter is finally disposed of but with no order as to costs.
1.This is an application under Section 256(2) of the IT Act of Revenue with a request to this Court to answer the following question of law referred by Tribunal. The same is reproduced herein :
'Whether, on the facts and in the circumstances of the case, Tribunal was justified in law in holding that the assessee was correct in claiming entertainment tax subsidy as capital receipt ?'
2. Learned counsel for the applicant/Revenue submitted that this question has been answered by the judgment of the Supreme Court in CIT v. Rajaram Maize Products : [2001]251ITR427(SC) . In fact, the aforesaid judgment is based on earlier judgment of the Supreme Court in Sahney Steel & Press Works Ltd. and Anr. v. CTT : 1997ECR787(SC) in which it has been held that subsidies are revenue receipts and have to be taxed, accordingly.
3. In the present case, the assessee had received entertainment tax subsidy. Thus, on applying aforesaid ratio of the Supreme Court as mentioned above in two cases, we hold that it will be a revenue receipt and not capital in the hands of the assessee. Thus, we answer the question in favour of the Revenue and against the assessee. Accordingly, this matter is finally disposed of but with no order as to costs.