M/S. SAHNEY STEEL & PRESS WORKS LTD. HYDERABAD vs COMMISSIONER OF INCOME TAX.ANDHRA PRADESH-I , HYDERABAD

The Supreme Court addressed the taxability of subsidies received by an assessee-Company from the Andhra Pradesh Government under the Income Tax Act. The Court held that the subsidies, which were production incentives contingent upon the commencement of production, do not constitute revenue receipts and are therefore not taxable. The Court emphasized that the incentives were designed to support production rather than to fund the establishment of the industry, thus falling outside the purview of taxable income under the Act.