CAPITAL OR REVENUE RECEIPTS

Last updated: 20 October 2008

Court :
SUPREME COURT

Brief :
Whether compulsory deduction made by sugar cooperative societies on account of non-refundable and refundable deposits and other funds are revenue receipts liable to be taxed under the Income Tax Act.

Citation :
Siddheshwar Sahakari Sakhar Kaarkhana Ltd. Vs. C.I.T (2004) 270 ITR 1 (SC)

The court held that the amount which the society deducts from the cane prices as per its bye laws towards refundable and non refundable deposits can not be treated as the income of the society.As the bye laws contains the provisions of transferability of deposit and refund of deposit to members at the time of cessation of membership or to legal heirs at the time of death.