Subsidies are to be included in “profits and gains of business or profession”: Supreme Court [Read Judgment]
9 years ago

Subsidies are to be included in “profits and gains of business or profession”: Supreme Court [Read Judgment]

Live Law  

Supreme Court in Commissioner Of Income Tax vs. M/s. Meghalaya Steels, has clarified that subsidies allowed to assessee, has to be included under the head “profits and gains of business or profession”, and not under the head “income from other sources” for the purpose of Income Tax assessment.Dismissing the appeal preferred by the Revenue, the Apex Court Bench comprising of. Meghalaya Steels, has clarified that subsidies allowed to assessee, has to be included under the head “profits and gains of business or profession”, and not under the head “income from other sources” for the purpose of Income Tax assessment. Nariman observed that so long as profits and gains emanate directly from the business itself, the fact that the immediate source of the subsidies is the Government would make no difference, as it cannot be disputed that the said subsidies are only in order to reimburse, wholly or partially, costs actually incurred by the assessee in the manufacturing and selling of its products. Thus understood, it is clear that profits and gains are derived from the business of the assessee, namely profits arrived at after deducting manufacturing cost and selling costs reimbursed to the assessee by the Government concerned.” Referring to Section 28 of the Income Tax Act which specifically states that income from cash assistance, by whatever name called, received or receivable by any person against exports under any scheme of the Government of India, will be income chargeable to income tax under the head “profits and gains of business or profession”, the Bench said “If cash assistance received or receivable against exports schemes are included as being income under the head “profits and gains of business or profession”, it is obvious that subsidies which go to reimbursement of cost in the production of goods of a particular business would also have to be included under the head “profits and gains of business or profession”, and not under the head “income from other sources”.

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History of this topic

Income From Capital Gains On Certain Assets Which Are Excluded U/S 10(38) Of IT Act Must Be Included While Computing Book Profits: Delhi HC
2 months, 3 weeks ago

Income From Capital Gains On Certain Assets Which Are Excluded U/S 10(38) Of IT Act Must Be Included While Computing Book Profits: Delhi HC

Live Law  

The Delhi High Court held that proviso to Sec 10 cannot be read in reverse to mean that if gains are not included as book profits u/s 115JB, the same are liable to be included as income for purposes of assessment to tax under the normal provisions. The Division Bench of Acting Chief Justice Vibhu Bakhru and Justice Swarana Kanta …

Waiver Of Interest To Be Treated As Income In Hands Of Assessee: Says SC In An Amalgamation Matter [Read Judgment]
7 years, 11 months ago

Waiver Of Interest To Be Treated As Income In Hands Of Assessee: Says SC In An Amalgamation Matter [Read Judgment]

Live Law  

When the assessee is allowed the benefit of the accumulated losses, while computing those loses, the income which accrued to it had to be adjusted and only thereafter net losses could have been allowed to be set off by the assessee company, said the Bench.Supreme Court of India in M/s McDowell v. CIT Karnataka held that to ascertain the actual …

Waiver Of Interest To Be Treated As Income In Hands Of Assessee: Says SC In An Amalgamation Matter [Read Judgment]
7 years, 11 months ago

Waiver Of Interest To Be Treated As Income In Hands Of Assessee: Says SC In An Amalgamation Matter [Read Judgment]

Live Law  

When the assessee is allowed the benefit of the accumulated losses, while computing those loses, the income which accrued to it had to be adjusted and only thereafter net losses could have been allowed to be set off by the assessee company, said the Bench.Supreme Court of India in M/s McDowell v. CIT Karnataka held that to ascertain the actual …

Subsidies are to be included in “profits and gains of business or profession”: Supreme Court [Read Judgment]
9 years ago

Subsidies are to be included in “profits and gains of business or profession”: Supreme Court [Read Judgment]

Live Law  

Supreme Court in Commissioner Of Income Tax vs. M/s. Meghalaya Steels, has clarified that subsidies allowed to assessee, has to be included under the head “profits and gains of business or profession”, and not under the head “income from other sources” for the purpose of Income Tax assessment.Dismissing the appeal preferred by the Revenue, the Apex Court Bench comprising of. …

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