only ground, pressed by assessee in present appeal, is, whether cash compensatory support of Rs. 2,20,375, received by assessee, during previous yeaiir, corresponding to assessment year 1979-80, from Government of India, for exporting specified engineering goods, is taxable or not. 2. Before we not rival submissions on this subject in detail, let us ascertain as to what cash compensatory support is and why and how it is given. 3.1 As process of planning proceeded apace in our country, need f o r augmenting our foreign exchange sources, to finance plans, was felt more and more. One of ways of achieve this objective was to increase exports from country. Special Export Promotion Scheme regarding engineering goods was devised by Government in 1963, under which supply of raw materials of iron and steel at concessional rates was, inter alia, provided to manufacturers to enable them to produce exportable engineering goods at cheaper rates, which would make them competitive in international market. As these efforts were proving inadequate, Indian rupee was devalued on 6-6-1966. This had effect of making Indian goods cheaper in international market, thereby making them more competitive. As supplementary measure and, with view to make export of goods, particularly engineering goods more viable, Government announced scheme of giving cash assistance to exporters of specified engineering goods. details of scheme were communicated by Ministry of Commerce in letter dated 17-8-1966, addressed to Engineering Export Promotion Council, contents of which, inter alia, were as follows: "1. (i) Government of India have decided to grant cash assistance against exports, effected from 6-6-1966 of specified engineering products. list o f products eligible for such assistance with percentage of assistance is annexed. There will be no concessional supply of iron and steel in addition... " Sub-para (ii) of para 1 of above letter excluded certain items from cash assistance Sub-para (iii) provided that'... non-ferrous manufacturers other than those listed in para 1(ii) above, and not covered by any item in list annexed, will qualify for 10 per cent cash assistance'. On other items also, cash assistance was worked out as percentage of f. o. b. value. 3.2 To put export effort on more sustained, integrated and durable basis, Government of India brought forward in 1970 Export Policy Resolution, which stressed, inter alia, that - "... expansion of export earnings is as crucial for financing plan as mobilisation of domestic resources. To achieve national self reliance and to reduce dependence on external assistance, export earnings need to be expanded at higher rate. " It pointed out that - "A steady increase in export earnings is dependent on continues development and expansion of export - oriented production... " and noted that - "Indian industries have begun to compete in international market on strength of their own inherent efficiency. main responsibility for task of further improving their competitive ability naturally rests with producing units. Government will, however, provide necessary assistance to build up efficient production and, in meanwhile, endeavour to compensate exports for temporary handicaps that stem from transitional difficulties inherent in developing economy and to alleviate disadvantages arising from our domestic fiscal or tariff barriers in importing countries... " 3.3 In pursuance of above Export Policy Resolution, steps were taken to improve Export Promotion Schemes and to devise new ones. Estimates Committee of Parliament (1981-82) in their 23rd Report to Parliament, listed following schemes, which were in vogue to augment export efforts: (see para 1.3) (i) Cash Compensatory Support Scheme. (ii) Import Replenishment Scheme. (iii) Duty Drawback Scheme. (iv) Tax Concession Scheme for selected type of expenditure for market development abroad. (v) Exemption from sales tax for sales abroad. (vi) Provision of finance for exports for short, medium and long terms from banks at better terms than for domestic activities. (vii) Provision for raw material, including indigenously available raw materials at international prices and provision for export credit insurance at relatively cheaper rates. 3.4 operation of above schemes has been reviewed from time to time to bring them in tune with developing trading conditions in country and abroad. last such review was done by Dr. Alexander Committee in 1977-78, when it examined, inter alia, role of instruments such as Cash Compensatory Support (CCS), duty drawbacks, etc., in promotion of India's export effort. object of review was that "the existing pattern of CCS on exports should be restructured keeping in view changes that have been brought about in Import Export Policy and Procedures, present level of competitiveness attained by export products and long term potential of products in such manner that they can sustain themselves in export market on their own after some initial period of assistance". Dr. Alexander Committee identified following three basic principles for determining CCS: " (a) level of CCS should fully compensate for various types of indirect taxes, sales tax, etc., which exporter has to pay on his inputs imported or domestically purchased and which are not refunded. This will enable him to be on par with foreign competitors. (b) CCS should be such as to encourage him in adopting adequate marketing strategies and to neutralize disadvantages of freight, etc., so as to be competitive in export market. (c) In case of new products in new markets, magnitude of CCS should be adequate to take care of initial promotional costs. " 3.5 above criteria were brought to attention of all Export Promotion Councils by Ministry of Commerce, Government of India, vide its Letter No. 12(32) of 1978-EAC dated 23-10-1978 (see page 8 of paper book), and on basis of above principles, Ministry called for relevant date from Export Promotion Councils and, for this purpose, devised proforma, which has been placed on record at pages 1 to 7 of assessee's paper book. 3.6 CCS is of same genre as original scheme of cash assistance stipulated in letter dated 17-8-1966 of Ministry of Commerce, supra. It was so clarified by Ministry of Commerce, Government of India vide its letter dated 23-1-1976 (see page 11 of paper book), wherein following was, inter alia, stated: "It is classified that phrase 'cash compensatory support', used in instructions, referred to above, is in no way different from cash assistance scheme. " 3.7 scheme of cash assistance in course of time, no doubt, came to be based on more elaborate and scientific principles than when it was devised soon after devaluation of Indian rupee in June, 1966, but its objective and its nature continued to remain unchanged all along, namely, to assist Indian exports to become competitive in international markets so that they will, ultimately, hold on their own in said field. 3.8 Estimates Committee of Parliament, in its 23rd Report to Parliament, described rationale behind CCS in following terms: "The rationale behind giving cash compensatory support on exports is to compensate exporters for various non-refundable taxes and to neutralize disabilities, which are inherent in our present state of economic development. " While explaining criteria for fixation of rates of CCS, as recommended by Dr. Alexander Committee and, as accepted by Government, Committee observed at page 23 of Report, inter alia, as follows: "... Indian exporters, particularly those of manufactured products, suffer from variety of inherent handicaps, which adversely affect their competitiveness. Apart from cumulative burden of various indirect taxes and levies, which are not refunded through mechanism of duty drawbacks, there are also serious handicaps on account of factors like higher rates of interest payable in India on working capital employed in export production and duty burden on capital goods used for export production. Also, it has been observed that freight rates from Indian ports to destinations in Europe and other places are higher than those from Hong Kong, Taiwan, etc., to same destinations. Thus, there is inherent freight disadvantage which makes our exports relatively uncompetitive. It is with view to neutralising at least in part effect of these various handicaps and consistent with competitive and developmental needs of our exports that scheme of Cash Compensatory Support to exports has been devised. " 4.1 CCS is only one of export promotion measures adopted by Government of India and to have comprehensive view of problem it would b e appropriate to note multipronged approach of Government in this regard for all these measures combined together that constitute integrated whole. Such measures have been divided into three categories as below (see Chapter II of Report of Estimates Committee referred to above): A. Material Input Facilities, B. Fiscal Incentives, and C. Export Credit. 4.2 Fiscal incentives are provided in following forms: (i) Market Development Assistance - This scheme was introduced in 1963 and is rendered for meeting expenditure on compensatory support for certain exportable commodities and grants-in-aid for schemes and projects for development of markets abroad and covers market research, commodity development of markets abroad and covers market research, commodity research, export publicity, participation in trade fair and exhibitions, grants-in-aid, to export promotion councils, etc. (ii) CCS (discussed earlier). (iii) Duty Drawback and Duty Exemption Scheme - It is internationally accepted principle that goods exported out of country are relieved of duties borned by them at various stages of their manufacture so that they become competitive in world market. most widely adopted method of relieving export goods of such burden is scheme of drawback. Duty Exemption Scheme introduced in 1976 provides for duty free imports of certain specified raw materials and components against advance licences for execution of specific export orders. exporters availing of this facility have to enter into bond with customs department. (iv) Free Trade Zones - units working in these zones have to export their entire production. From point of view of duty and other taxes free trade zone is extended version of idea of manufacture in bond, viz., Duty Exemption Scheme. (v) Concessions in direct taxes, e. g., section 35B, etc. 4.3 Material input incentives. objective of measures in this category is to provide support so as t o enable exporters and those engaged in export promotion to obtain imported and other inputs on somewhat preferential basis. These are: (i) Import Replenishment Licensing Scheme - These licences are issued only to replenish import content in products exported in respect of banned and canalised items, (ii) supply of certain domestic materials at international prices, (iii) preferential allotment of certain key materials. 4.4 Export credit With view to making available adequate credits at cheaper rate of interest to exporters, Government announced in June 1968 scheme called Export Credit (Interest Subsidy) Scheme, 1968 for grant of subsidy towards interest charges on export finance provided by banks. For this purpose Reserve Bank prescribes ceiling on interest charges qualifying under scheme. ceiling rate of interest is fixed by Reserve Bank of India, from time to time. existing rate is 11 1/2 per cent on pre-shipment credit and post- shipment credit and 8 per cent on exports on deferred payment terms. Government pays subsidy of 1.5 per cent on such export credits to financing banks. types of credits available under scheme to exporters are: (i) Packing credit or pre-shipment credit. (ii) Post-shipment credit. 5. In addition to above, Ministry of Commerce, Government of India, devised special Export promotion Scheme for engineering goods. Clause (5) of said scheme provided, inter alia, as below: "The benefits which may be granted to registered exporter under scheme will consist of: (a) Import entitlements - Against exports of products, mentioned in Annexure v, registered exporter will be entitled to import entitlements as indicated in same annexure. (b) Allocation and supply of indigenous raw materials, etc., in accordance with Annexure VI. " 6. above is, thus, conspectus of various export schemes aimed at augmenting exports in context of which nature of CCS, its rationale and its purpose have to be evaluated. 7.1 (a) Now let us note rival submissions. contention of learned counsel for assessee was that CCS was bounty or subsidy, kind of gift from Government and was not, therefore, supplementary trading receipt and that it has been given by Government to assessee voluntarily and not in terms of contract, or statute and, that, it does not represent reimbursement of any specified expenditure, incurred by assessee. If it were so, it might be trading receipt as held by their Lordships of Supreme Court in case of Bengal Textiles Association v. CIT (1960) 39 ITR 723, 728. According to learned counsel, question to be asked in present case is, as was in that case, whether payment received is for services rendered or it was payment of bounty? Admittedly, payment in question by Government is not for services rendered and there was no obligation on Government to pay said amount to exporter. It was its sweet will and pleasure that Government was giving CCS and so it clearly partook of nature of gift or bounty. It could decide not to pay it any time. There was no quid pro quo involved, and no contractual liability on part of Government to pay it. It was, therefore, pure and simple bounty or subsidy and so not assessee's income. 7.1 (b) According to assessee, there is no statutory provision under which CCS was paid. It was paid solely in exercise of executive discretion of government and source of CCA was letter of Ministry of Commerce, Government of India, dated 17-8-1966 referred to in para 3.2, supra. said circular has been issued by Government of India, not in exercise of any legislative or statutory powers, but purely in exercise of its executive powers and can be revoked by it at will, or its terms could be varied at will. There was no privity of contract between assessee and Government of India in terms of which CCS is received and, therefore, it could not be regarded as supplementary trading receipt. 7.2 next point made out by assessee's learned counsel was that every receipt was not income, more particularly when it partook of nature of bounty or gift. It was for revenue to show that receipt, which was prima facie bounty, was nevertheless taxable being supplementary trading receipt. Such burden has not been discharged in present case. Reference was made in this regard to decision of Hon'ble Supreme Court in case of Parimisetti Seetharamamma v. CIT (1965) 57 ITR 532. 7.3 (a) purpose of CCS, according to learned counsel, was to encourage exports. It was general purpose and payment made for general purpose will not be supplementary trading receipt. It will be non-trading receipt. T o buttress this argument, reference was made by learned counsel to Export Policy Resolution of 1970 and letter of Government of India dated 23-10-1978 (referred to above) wherein purpose of CCS is spell out, inter alia, to be to sustain in export market on their own. CCS is paid out of consolidated Fund of India for above general purpose. It has nothing to do with various trading activities or expenses incurred by assessee. test laid down by Hon'ble supreme court in case of V. S. S. V. Meenakshi Achi v. CIT (1966) 60 ITR 253, will, therefore, govern present case and amount, not being reimbursement of specific trading expenses, will not be trading receipt. 7.3 (b) Reference was also made in this connection to decision of House of Lords in case of Seaham Harbour Dock Co. v. Crook (H. M. Inspector of Taxes) (1931) 16 TC 333. As learned counsel for assessee dwelt on this case at length and has mainly relied upon its ratio, it will be pertinent to note facts f case and decision of Court of Appeals and House of Lords thereon little in detail and we do so as below: (a) Seaham Harbour Dock Co. was carrying on business of managing Seaham Harbour Docks. On 31-7-1923, it obtained Act of Parliament to enable it to extend its docks at Seaham Harbour, and work thereon was commenced shortly after that date, cost being estimated at pound s 152,000. Under aforesaid Act, company was allowed to raise by issue of debenture stock pounds 75,000 only. said sum of pounds 75,000 was obtained from Treasury of balance amount required for dock extension, pounds 50,000 was obtained by loan from Marquin of London Derry and pounds 25,000 by loan from London Derry Colliers Ltd. These amount were in nature of unsecured loans. On 10-9-1923, Mr. Dillon, one of directors of company, wrote to Unemployment Grants Committee on behalf of company, asking for assistance in carrying through work of extending docks, and on 6-11-1923, committee replied to effect that they were, inter alia, prepared to sanction grant equivalent to half interest they were, inter alia, prepared to sanction grant equivalent to half interest at rate not exceeding average of 5 1/2 per cent per annum on approved expenditure met out of loans (not exceeding pounds, 1,52,000) for period of two years from date or dates on which payments were made. Provision was also made for payment of grants by periodical remittances. Applications for payments of grant in respect of work done were made periodically and installments of rants were received by company from Unemployment grants committee also periodically. said installments of grants were always credited to revenue in accounts of company. During period when construction was going on and installments were received, there was no trading done by company. (b) On above facts, question for determination was whether grants received as above were revenue receipts. General Commissioners were of opinion that grant was revenue. Rowlatt, J. of Kings Bench Division framed above opinion. On appeal, Court of Appeals reversed above finding and held, as per Lord Hanworth, M. R., that 'the grant was made by Government body and was capital', that this sum was sum paid at and out by Unemployment Grants committee for purpose of adding to and completing capital sum of which there was insufficient subscription before it was received, and that 'they were paid in order to advance capital expenditure to be made by Seaham Harbour Dock Company, and they cannot be brought within case I of schedule D, they cannot be said to be sums which were received in respect of trade and so taxable under Schedule or Schedule D'. Sleasser, LJ. also expressed similar opinion and said that 'it is clear that grant in question was grant of capital expenditure and was not taxable..'.. Romer, LJ. also expressed his agreement with above viewpoint. (c) Crown appealed against above decision of Court of Appeals to House of Lords, who confirmed decision of Court of Appeals, though their reasoning was different. Lord Buckmaster, who gave leading judgment, first noted facts of case and controversy arising therefrom and then proceeded to express his opinion as follows: "Now I do not myself think, that matter can be put more succinctly than it was put by Mr. Hills when he said 'was this trade receipt? ', and my answer is most unhesitatingly, No. It appears to be that it was nothing whatever of kind. It was grant which was made by Government Department with idea that by its use men might be kept in employment, and it was paid to and received by dock company without any special allocation to any particular part of their property, either capital or revenue, and was simple to enable them to carry out work upon which they were engaged with idea that by so doing people might be employed. I find myself quite enable to see that it was trade receipt, or that it bore any resemblance to trade receipt. It appears to me to have been simply grant made by government for purposes which I have mentioned, and in those circumstances, cannot be included in revenue for proposes of tax. " (d) Lord Akin endorsed above view and further added, inter alia, following: "It appears to me that when these sums were granted and when they were received, by appropriate body, not as part of their profits or gains or as sum which went to make up profits or gains of their trade. It is receipt which is given for express purpose which is named, and it has nothing to do with their trade in sense in which you are considering profits or gains of trade. It appears to me, with respect, to be quite irrelevant whether money, when received is applied for capital proposes or is applied for revenue purposes; in neither case is money properly said to be brought into computation of profits or gains of trade. " 7.4 According to assessee's learned counsel, ratio of above decision was that, if grant is made by government department for specified purpose, it will not be trading receipt even if receipt was utilised in business of assessee and resulted in acquisition of trading asset. What governed nature of receipt was purpose of grant and not mode of utilization of grant by recipient. above ratio clearly applied, according to learned counsel, to facts of present case, for here purpose of CCS was not to reimburse expenses incurred by assessee, or to reduce its losses, or to augment its profits, but 'to sustain exporters in export market on their own', and 'expansion of export earnings' of country as whole. This was specified purpose of general nature and grant given for this purpose will not become trading receipt, even if it was used I assessee's business and, ultimately, became part O assessee's capital. 7.5 (a) above case, pointed out learned counsel, came to be considered by their Lordships of Hon'ble Delhi High Court in case of Siddhartha Publications (P.) Ltd. v. CIT (1981) 129 ITR 603, and its ratio was applied by their Lordships to facts of said case, which, according to learned counsel, has striking similarity to facts of present case. assessee, in that case, was publishing English magazine, 'Thought'. assessee approached organisation, known as 'Worldwide Partnership', with its headquarters at Bonn for some financial assistance, so that magazine could pay to its writers adequately so that quality of its articles could improve and it could give brighter look to magazine by improving its format and layout. It also requested that said organisation should created bulk subscriptions for magazine run by assessee. aforesaid organisation, in response to assessee's letter, gave to assessee sum of Rs. 28,342 by way of donation and expressed hope that 'this contribution may also help you to increase your circulation and to put your paper on more economical footing'. (b) On above facts, question for determination before their Lordships was, whether aforesaid sum was of revenue nature. Their Lordships held: (i) that aforesaid payment was voluntary payment and depended entirely on whim of donor and could not, therefore, be income, (ii) that it was casual receipt and depended on sweet will of donor, and, if not paid, could not be forced, (iii) that payment was non-recurring in nature because payee had no right of expectation, (iv) that no services were rendered by assessee to foreign organization. payment was purely by way of donation or gift or bountry, and, therefore, was not income. (c) Their Lordships referred to decision in Seaham Harbour Dock Co.'s case (supra) and observed, inter alia, as follows: "In House of Lord, Lord Buckmaster pointed out that question, whether it was trade receipt, had to be unhesitatingly answered by saying that it was nothing whatever of that kind. same answer, it appears to us, should come out more unhesitatingly, in present case. " (p. 608) (d) ratio of above case, according to learned counsel of assessee, squarely applied to facts of present case. Even though amount of Rs. 28,312 in above case was paid specifically to improve business of assessee, it was not held to be revenue receipt, because it was voluntary payment depending on sweet will of donor. Similarly, in present case, payment of CCS was entirely voluntary on part of Government, which could scrap scheme of CCS on any day it liked. No services were rendered by assessee to Government to get CCS. It was purely act of grace on part of Government to pay it, it was gift or donation, and, hence, not taxable. 7.6 Reference was also made by learned counsel to decision of Hon'ble Delhi High Court in case of Addl. CIT v. Handicrafts and Handloom Export Corpn. (1982) 133 ITR 590 in support of proposition that every receipt, even if it be in respect of business, say to wipe out losses or to meet certain expenses would not suo motu be of revenue nature. In that case, assessee-company was subsidiary company of State Trading Corporation (STC) for assessment years 1964-65 and 1965-66, assessee incurred losses, which were reimbursed by STC. question was, whether reimbursement of losses could be treated as revenue receipts, having effect of wiping out losses incurred by assessee. Their Lordships held that: "... This was clearly case in which assessee had incurred trading loss and all that had happened was that STC, having regard to relation with assessee, had agreed to discharge liabilities of assessee and reimburse it to extent of such loss. This was analogous to case of person agreeing to meet losses incurred by another person in carrying on business and to discharge debts incurred by him out of affection or regard. loss incurred by assessee could not be ignored merely because it had been made by STC, holding company, and it could not be said that loss had ceased to exist." (p. 590) above view has been reiterated by Hon'ble Delhi High Court in Handicrafts & Handloom Export Corpn. of India v. CIT (1983) 140 ITR 532. assessee's contention, based on above observations, was that receipts of CCS fell in above category and could not, therefore, be treated as revenue receipts. 7.7 learned counsel for assessee conceded that decision of Hon'ble Calcutta High Court in case of Jeewanlal (1929) Ltd. v. CIT (1983) 142 ITR 448, was direct authority with regard to CCS and it has been held therein that CCS was revenue receipt, but, according to learned counsel, said decision was wrong and ought not to be followed. (a) first mistake that was committed by their Lordships, according to learned counsel, was that they did not perceive distinction between natures of import entitlements, duty drawbacks and CCS and proceeded on footing as if they were of same genre, whereas, in fact, it was not so. According to him, import entitlements and duty drawbacks were given by Government in terms of section 3 of Imports and Exports (Control) Act, 1947, but granting of CCS could not be related to any such statutory provision. It was reply administrative act, and its authority lay in circular of Ministry of Commerce dated 17-8-1966, referred to above. Therefore, CCS could not be construed to giving rise to right in favour of assessee which bore character of statutory right, which would, in turn, give rise to legally enforceable debt against Government in favour of assessee. letter of Government dated 17-8-1966 made no reference to exercise of any statutory powers by Government and was purely administrative act of Government creating non-enforceable right for exporters to claim such assistance. Hon'ble Calcutta High Court, according to learned counsel, failed to perceive this fundamental difference in character of CCS compared to that of import entitlements and duty drawbacks, which, according to learned counsel, were backed up by statutory provisions contained in section 3. (b) Secondly, Calcutta High Court was misled to believe that language of circular letter of Government dated 17-8-1966 was same as that of letter dated 24-8-1966, written by Engineering Export Promotion council to its members. In fact, there was glaring deference in two. Whereas Ministry's letter dated 17-8-1966 made no reference, whatsoever, to purpose of cash assistance being to meet any losses, suffered by specified exporters on account of devaluation of rupee, that gloss was put upon it by Engineering Export Promotion Council in its letter dated 24-8- 1966. Hon'ble Calcutta High Court erred in proceeding on footing of this gloss. If such gloss is removed, cash assistance would be nothing but outright grant or subsidy directed towards national policy objectives of generating more foreign exchange resources and development of export markets and, hence, directly covered by ratio of decision in case of Seaham Harbour Dock Co. (supra). (c) Their Lordships of Hon'ble Calcutta High Court further erred in not taking their cue from decision of their Lordships of Hon'ble Supreme Court in case of Shri Ambica Mills Ltd. (No. 1) v. Textile Labour Association AIR 1973 SC 1081, wherein their Lordships defined 'subsidy' and explained that various exports subsidies were given by Government not by way of payment for services rendered by exporters to Government but they were pure subsidies and any exporter could take advantage of Government schemes and 'would be entitled to subsidy or subsidy or assistance promised by Government'. In Bengal textile Association's case (supra), this distinction between payments made by government for services rendered and awarding of subsidy had been taken note of by their Lordships of Hon'ble Supreme Court, and it had been impliedly held by them therein that subsidy will not be assessable. Hon'ble Calcutta High Court, according to learned counsel, failed to draw proper inferences from above cases, even though it noted them, and so it could not provide proper guidance to decide present controversy. controversy. (d) next mistake committed by their Lordships, according to learned counsel, was in leaving following test: "... It appears to us that what is decisive in these matters is nature of business, nature of income and nature of right to receive and also relation inter se, that is key to resolve issue in light of general principles which are to be followed in such cases... " (p. 458) According to learned counsel, above tests were opposed to real and correct test laid down by House o Lords in case of Seaham Harbour Dock Co. (supra) viz., 'was this trade receipt? " This, and not tests evolved by Hon'ble Calcutta High Court, was true test and, if applied properly, it would yield answer in favour of assessee, as CCS cannot be regarded as trade receipt. (e) It was brought to our attention by learned counsel that because of above errors in judgment of Hon'ble Calcutta High Court, Bench 'D' of Tribunal, Delhi Benches had refused to follow above decision of Hon'ble Calcutta High Court in IT appeal No. 1143 (Delhi) of 1979 vide their order dated 29-5-1985, wherein, in para 47 of their order, Hon'ble members have observed, inter alia, as follows: "... we are inclined to hold with great respect, that ruling of Hon'ble Calcutta High Court, reported in Jeewanlal (1929) Ltd. v. CIT (1983) 142 ITR 448, cannot be taken as binding authority for treating CCS receipts in assessee's hands, as receipts of its export business liable to tax. " According to our brothers: " It was not possible to conceive of CCS receipts of assessee's business or trade. There was no trading relationship as between assessee and Government who made grant. There was n o contract between parties. There was not even stipulation making it condition of grant that assessee should carry on business of export of its products. If, after having effected export of its products, assessee had decide to discontinue business, grant would still have been made on exports already effected even though business had come to end...' It is urged by by learned counsel for assessee that we should follow above order of 'D' Bench of Delhi Benches of Tribunal and refuse to follow Hon'ble Calcutta High Court. According to him, we were duty bound to follow above order of 'D' Bench, and in case we were inclined to hold to contrary, we should refrain from passing order ourselves and should, instead, refer matter to Hon'ble President of Tribunal to constitute larger bench for determining present controversy. 7.8 learned cousel, in alternative, relied on decision of Commissioner (Appeals) in case of Gedore Tools (I.) (P.) Ltd. for assessment year 1979-80 wherein said Commissioner (Appeals) has held that 4 1/2 per cent out of 10 per cent of CCS should be held as accruing to assessee on capital account and that remaining part of CCS was revenue receipt. This allocation has been done by him on ad hoc basis taking his cue from various factors, that have been borne in mind by Dr. Alexander Committee to determine quantum of CCS as explained by learned commissioner (Appeals) in para 10 of his order dated 28-5-1984, which has been placed on record. 8.1 On behalf of revenue, each of above submissions so contested and it is submitted that CCS is nothing but trading receipt, it reaches assessee, not de hors his export business, but because of it. If he would not export goods, he would get no CCS. There was direct causel nexus between exports of engineering goods and granting of CCS by Government and so CCS was being received by assessee in course o his trade and as trader to enable it to run its export business, more competitively and, hence, more profitably. It was not gift out of natural love or affection as was position in case of Handicrafts & Handloom Export Corpn. (supra) relied upon by learned counsel for assessee. In fact, in very same judgment, their Lordships have explained legal position at page 596. According to it, if loss of said assessee was met by awarding of grants-in-aid by Government of India, as it was done earlier, such grants-in- aid, according to their Lordships, would be trading receipts. following observations of their Lordships are relevant in this connection: "An attempt has been made on behalf of department to equate reimbursement by STC with reimbursement said to have been made by Government. In our opinion, this attempt ignores fundamental difference in nature of payments made by Government on one hand and by STC on other. While it is true that government was requiring assessee's loss, when assessee was branch of Government i. e., till 1962, nature of grants given by Government during years in question are total different. It has been found by all authorities and in particular by Tribunal in both appellate orders and in statement of case that amounts given by Government were in nature of grants-in- aid. In other words, they were not of same nature as reimbursement made by STC. They were amounts paid by Government to assessee which was carrying on export business to promote its activities and subsidies given by Government to enable assessee to carry on its export business more efficiently and satisfactorily were part of trading receipts of STC. W e are of opinion that Tribunal was right in refusing to equate reimbursement given by STC with grants-in aid given by Government. " (p. 596) CCS was also, according to learned departmental representative, in nature of grants-in-aid give by Government to assessee, and, for that matter, to every exporter who fell in category of assessee, to carry on its export business 'more efficiently and more satisfactorily' and more competitively, so that country's exports as whole will augmented leading to higher foreign exchange earnings by country, and were, therefore, as per observations of Hon'ble Delhi High Court, as above, 'part of trading receipts' of assessee. 8.2 To explain as to what was subsidy, our attention was invited by learned departmental representative to judgment of their Lordships of Hon'ble Supreme court in case of Shri Ambica Mills Ltd. No. 1 (supra). According to their Lordships, subsidy would mean direct cash payments. In this connection, their Lordships approvingly quoted some definitions of said term, as appearing in various dictionaries. following definitions were noted by their Lordships in this regard: Lordships in this regard: "'... grant of public money in aid of some enterprise, industry, etc., or to keep down price of commodity...' ** ** ** '... money paid by Government to producers of commodity so that it can be sold to consumers at low price....' ** ** ** 'A subsidy is grant of funds or property from Government... to private person or company to assist establishment or support of enterprise deemed advantageous to public....' " (p. 1083) In accordance with above definition, cash allowance and CCS were clearly 'subsidy' granted by Government to exporters of specified engineering goods, and was, as such, supplementary trading receipt of assessee, as per decision of Hon'ble Delhi High Court, referred to above. above decision of Hon'ble Delhi High Court it was pointed out, was in tune with decision of House of Lords in case of Pontypridd and Rhondda Joint Water Board v. Ostime (H. M. Inspector of Taxes) (1946) 14 ITR (Suppl.) 45. Therein, Viscount Simon state law on point as follows: "The first proportion is that, subject t exception hereafter mentioned, payments in nature of subside from public funds made to under taken to assist in carrying on undertaker's trade or business are trading receipts, that is, are to be brought into accounting arriving at balance of profits or gains under Case I of Schedule D.... second proposition constitutes exception. If undertaker is rating authority and subsidy is proceeds of rates imposed by it or comes from fund belonging to authority, identity of source with receipient prevents any question of profits arising;..." (p. 47) According to learned departmental representative, case of present assessee is squarely covered by first proposition, referred to above, and second proposition did not apply to it, as assessee was not rating authority. subsidy received by it in form of CCS was, thereof, trading receipt. observations of Hon'ble High Court, extracted above in para 8.1 were, thus, based on high authority, and were, in any case, binding on us. 8.3 (a) Apart from Hon'ble Delhi High Court, other High Courts have also taken similar view. Thus, in case of Ratna Sugar Mills Co. Ltd. v. CIT (1958) 33 ITR 644, it was held by Hon'ble Allahabad High Court, following decision in Pontypridd and Rhonadda Joint Water Board's case (supra) that payment made by Central Government to assessee in form of subsidy with object of compensating assessee for loss of profits arising to it from being compelled to pay additional wages to workmen by order of Uttar Pradesh Government was for purpose of business of company and not for separate or distinct purpose, and was, therefore, taxable receipt. (b) Similar view was taken by said High Court in case of H. R. Sugar Factory (P.) Ltd. v. CIT (1970) 77 ITR 614. In that case, Uttar Pradesh Government had given Rs. 40,419 to assessee with view to enable it to start early crushing with effect from 4-11-1956 at rate of 4 annas per md. of cane crushed up to 12-11-1956. assessee claimed it as non-trading receipt. This claim was not accepted by their Lordships, who held that above sum was taxable, as same arose from assessee's business. (c) In case of Ahmedabad Mfg. & Calico Printing Co. Ltd. v. CIT (1982) 137 ITR 616 (Guj.), one of questions for determination of their Lordships was as to whether cash subsidy and profits arising as result of utilizing import entitlements by way of saving and profits and gains derived from export of goods. It was urged before their Lordships that as result of export sales made by assessee-company, it became entitled to following benefits: (i) cash subsidy, (ii) import entitlements, which were transferable, and (iii) import entitlements which were not transferable but which could be utilized by company to import scarce raw materials at prices which were less than ruling in home market. It was urged that above benefits, which assessee acquired as direct result of exports made by it, must go into computation of profits and gains derived by it from export of goods. above plea was opposed by revenue, as, according to it, said sums were not derived from export business. Adjudicating on this controversy, their Lordships of Hon'ble Gujarat High Court observed as follows: "So far as cash subsidy or allowance by Government is concerned, it poses no difficulty. In our opinion, such subsidy or allowance should be held to be directly connected with export of goods. It was on account of export of goods made by assessee-company that cash subsidy or allowance was given. There is, therefore, direct nexus between export of goods and earning of income in shape of cash subsidy or allowance. proximate source of cash subsidy or allowance is export of goods. In our opinion, therefore, cash subsidy o r allowance has to be taken into consideration in ascertaining profits from exports made by assessee-company.... " (p. 633) learned departmental representative relied on above observations in support of his case, stressing in particular italicised portions. (d) Hon'ble Bombay High Court also expressed similar opinion regarding cash subsidy in case of Hindustan Lever Ltd. v. CIT (1980) 121 ITR 951, where they observed as follows: ".... For such subsidy or allowance it should be held that there was direct connection with exports effected and perhaps case of assessee that amount of subsidy or allowance be taken into consideration in ascertaining profits from exports may be required to be accepted..... " (p. 962) (e) Hon'ble MadrasHigh Court came to consider similar question in CIT v. Wheel & Rim Co. of India Ltd. (1977) 107 ITR 168, namely, that cash subsidy received by assessee was part of profits and gains derived by assessee by export of goods. Their Lordships held, inter alia, that cash subsidy would necessarily constitute business receipts referable to or derived from export of cycle rims. (f) Reference was also made by learned departmental representative to decision of Hon'ble Allahabad High Court in case of CIT v. Swadeshi Cotton Mills Co. Ltd. (1980) 121 ITR 747. In that case, assessee had received certain cash subsidy from Textile Export Incentive Scheme referable to quantum of its exports. assessee claimed that amount could not be taxed as its income, as it was its miscellaneous receipt. claim was negatived by their Lordships, who pointed out that: ".... export subsidy would not be have been paid to assessee had he not manufactured cloth and yarn and exported it. labelling of payment s export subsidy did not alter its character, for amount was paid by reference to amount of goods exported. payment being directly proportionate to quantity of goods exported, was revenue receipt, for it was additional payment received for goods sold by way of export.... " (p. 748) According to learned departmental representative, CCS, in case o f exporter of engineering goods, had similar character and was, therefore, directly covered by ratio of above decision and was as such taxable as trading receipt. (g) Similar view has been taken by Hon'ble Bombay High Court in case of Dhrangadhra Chemical Works Ltd. v. CIT (1977) 106 ITR 473, and learned departmental representative placed considerable reliance on it more particularly, because their Lordships have considered in it both decisions of House of Lords in Pontypridd and Rhondda Joint Water Board's case (supra) and Seaham Harbour Dock Co.'s case (supra). facts in above case were as below: assessee was one of manufactures of soda ash in country. During years 1950-51 and 1951-52, there was glut in market of soda s h because of large imports thereof. assessee-company and Tata Chemicals Ltd., two companies which were manufacturing soda ash in country, found it difficult to carry on business profitable and production of soda ash had been stopped in April 1949. Representations were made to Government of India for imposing restrictions on imports and for granting protection to soda ash indistry. Government referred matter to Tariff Board and, on basis of its recommendations, Government by resolution dated 22-2-1950 directed that manufacturers of soda ash should be allowed subsidy of Re. 1 per cwt. on soda ash produced by companies mentioned above and sold from date of resolution provided Government was satisfied that companies actually sold soda ash at fair selling price recommended by Tariff Board. Rs. 2,03,902 were given to assessee-company as subsidy as result of above resolution. company claimed it as non-trading receipt of casual nature. above claim was not accepted by Hon'ble High Court, who pointed out that sole object underlying grant of subsidy was to enable assessee-company and Tata Chemicals Ltd. to carry on their business in commercial manner so that it would yield profit. It was well settled, their Lordships pointed out, that where subsidies or grants are given by Government to assist trader in his business, they are, generally speaking, payments of revenue nature. They are supplementary trade receipts and not capital payments. Such receipt, under tests laid down by Viscount Simon in case of Pontypridd and Rhondda Joint Water Board (supra) was clearly revenue receipt, and had to be taken into account in arriving at income, profits and gains of business. Reference to case of Seaham Harbour Dock Co. (supra) was made by their Lordships and following observations were made with regard thereto: "Reliance was placed by Mr. Kolah upon decision of House of Lords in case of Seaham Harbour Dock Co. v. Crook (H. M. Inspector of Taxes) (1931) 16 TC 338 (HL). In this case dock company contemplating extension of its dock applied to Unemployment Grants Committee for financial assistance. Committee consented to sanction grants from time to time, as work progressed and was paid for equivalent to half interest for two years... Payments were made on this basis several times year for some years. Assessments to income-tax were made upon company upon footing that these payments were part of its annual profits or gains. House of Lords said that payments were not annual profits or gains liable to income- tax. Lord Buckmaster said at page 353: 'It was grant which was made by Government department with idea that by its use men might be kept in employment... I find myself quite unable to see that it was trade receipt...' Lord Atkin said at page 353: '.... when they were received, they were received by appropriate body not as part of their profits or gains or as sum which went to make up profits or gains of their trade.' So far as subsidy received by assessee from Government was concerned, it could not be regarded as falling into same category as unemployment grant in Seaham Harbour Dock Company's case (1931) 16 TC 333 (HL). On contrary, it was received as sum which enabled assessee-company to carry on its business of manufacture of soda ash profitably." (p. 481) It is submission of learned departmental representative that above observations will fully apply mutates is to facts of present case, because CCS was paid to assessee specifically with purpose of enabling assessee-company, as also other similarly situated exporters, to sell their goods in international market competitively and to enable them to become self-reliant in course of time so as to hold on in international market on their own. Prima facie, shorn of verbose, it meant that CCS was paid to enable assessee-company to carry on its export business more efficiently and profitably. (h) ratio of all these decisions, according to learned departmental representative, was that subsidy given by Government to industrialist or trader, in whatever form, would be revenue receipt, if it was given to him for carrying on his business. It would be non-trading receipt in case it was given for non-trading purpose, e. g., relief of unemployment as in case of Seaham Harbour Dock Co. (supra). Hon'ble Calcutta High Court has taken this view in unequivocal manner in respect of CCS itself in case of Jeewanlal (1929) Ltd. (supra). In that case, facts were absolutely identical to those in present case. reasoning of assessee claiming exemption from tax for CCS was also same as in present case. Protection of Seaham Harbour Dock Co.'s case (supra) was solicited there also and it was submitted on behalf of assessee that dominant purpose of Government for grant of amounts was promotion of exports. It was irrespective of profit or loss and it was not given by Government in order to meet any trading obligation, but, in larger interest of country to boost exports and to earn more foreign exchange wholly unconnected with business of assessee-company. When cash subsidy was given in such circumstances with object wholly unconnected with business of trader, it was argued that such assistance could not be regarded as trading receipt. above reasoning was negatived by their Lordships, who observed, inter alia, as below: ".... If on examination of nature of receipts of amounts it is found that these amounts were supplemental trading receipts or were connected with business, even though they did not arise actually from any positive operation of traders, then, in our opinion, it should legitimately be considered to be business receipts. In this case Government announced cash assistance for encouraging exports; but it was only exporters, who did, in fact, export, got assistance. It was by exportation or making favorable exports that assessee received these amounts. This, in our opinion, is true nature of assistances. If that is position then it is incidental to and supplemental to trading receipts and should, therefore, be considered to be revenue receipts.... " (p. 459) Their Lordships noted that similar view had been taken in other cases also, e. g.: Dhrangadhra Chemical Works Ltd.'s case (supra), Wheel & Rim Co. of India's case (supra), H. R. Sugar Factory (P.) Ltd'. s case (supra), Kesoram Industries & Cotton Mills Ltd. v. CIT (1978) 115 ITR 143 (Cal.), Bengal Textiles Association's case (supra) and V. S. S. V. Meenakshi Achi's case (supra). After adverting to above authorities, their Lordships observed: ".... In view we have taken about nature of receipts in instant case, that is to say, by exportation, assessee got assistance from Government for purpose of encouraging export market that may by motive of Government, it is connected inextricably with act of exportation and, therefore, supplemental to earnings by exportation.... " (p. 459) above ratio, according to learned departmental representative fully covered facts of present case. 9.1 learned departmental representative vehemently disputed submissions of learned counsel for assessee that Hon'ble Supreme Court had held in cases of: Shri Ambica Mills Ltd. No. 1 case (supra) and Bengal Textiles Association (supra), that subsidy given by Government was not taxable. former was case under Payment of Bonus Act, 1 9 6 5 and question there was whether subsidy shall be taken into consideration for determining profits of company out of which bonus was liable to be paid to workers. In view of specific provision of items which would go to computation of payment of bonus, Supreme Court held that subsidy was not to be included in computation of profit for purposes of said Act. Their Lordships were not considering in said case nature of subsidy from point of view of its inclusion in total income. They were considering it from point of view of its inclusion in allocable surplus for purpose of distribution of bonus. Payment of Bonus Act specifically provided that subsidy received from Government will be excluded from income of concern for purpose of determining allocable surplus. It was, therefore, totally erroneous to presume that case of Shri Ambica Mills Ltd. No. 1 (supra) was authority for proposition that subsidy was not trading receipt and would not, therefore, be includible in profits or gains of business in terms of section 28(i) of Income-tax Act, 1961 ('the Act'). Similarly, Bengal Textile Association's case (supra) dealt with provisions of Business Profits Tax Act, where, again by specific provision of Act, subsidy was excluded from purview of Business Profits Tax Act, 1947 and so this case could also not be cited as authority in support of assessee's plea that CCS was not trading receipt being subsidy. In view of it, there was no merit in submission of learned counsel that Hon'ble it, there was no merit in submission of learned counsel that Hon'ble Calcutta High Court had erred in not drawing proper inference from these cases, as mentioned in para 7.7 (c) (supra). 9.2 learned departmental representative further disputed validity of proposition, canvassed by learned counsel for assessee vide para 7.7(a) (supra) that CCS was of different nature from import entitlements and duty drawbacks, because, unlike latter two, it was not backed by any statutory provision, and that it was result of purely as administrative act and so no enforceable legal right was created in favour of assessee against Government in terms of which it could be claimed and that it was purely gratuitous act on part of Government to give CCS to assessee. According to learned departmental representative, CCS was part of same policy decision, as brought about scheme of import entitlements and duly drawbacks and statutory basis for all these schemes, which were intended to regulate, promote and chenilles country's exports lay in section 3 of Imports and Exports (Control) Act. So same statute as backed up by schemes of import entitlements and duty drawbacks was behind scheme of CCS and legally enforceable right in respect of CCS was created in favour of assessee against Government. In this connection, our attention is invited to following observations of their Lordships of Hon'ble Supreme Court in case of Shri Ambica Mills Ltd. No. 1 (supra): ".... These are schemes intended by Government for benefit of country and, therefore, any person would be entitled to take advantage of that scheme and be entitled to subsidy or assistance promised by Government.... " (p. 1086) words italicised above clearly indicate that legal right, which could be enforced in court of law, was created in favour of assessee and that this right flowed from section 3. In any case, right of equity based on principle of promissory estoppel was definitely created in favour of assessee as soon as he exported engineering goods eligible for grant of CCS and such right was in no way inferior to statutory right. Our attention was invited in this connection to decision of Hon'ble Supreme Court in case of Union of India v. Anglo Afghan Agencies AIR 1968 SC 718, which is leading authority for above proposition. That case involved consideration of export scheme under which respondents were entitled to get import entitlement certificate equal to 100 per cent of f. o. b. value of their exports. Textile Commissioner refused to grant 100 per cent import entitlements without assigning any reason for his action. Supreme Court, firstly, pointed out that Export Promotion Scheme was made to further purpose of Act, and so was statutory in nature and Textile Commissioner was bound to carry his obligations, under it. Presuming, however, that scheme was executive in character, it was no reason, their Lordships pointed out, as to why courts should not compel performance of obligations imposed by scheme upon authorities, when citizen, acting under scheme had done what he should do. Hon'ble Supreme Court, it was pointed out to us by learned departmental representative, has related forcefully above view in Motilal Padampat Sugar Mills Co. v. State of Uttar Pradesh AIR 1979 SC 621 and Jit Ram Shiv Kumar v. State of Haryana AIR 1980 SC 1285, 1292. In view of these epoch making judgments, pointed out learned departmental representative, it was futile to urge that CCS was not backed by legally enforceable right. It was not sweet will, whim or caprice of executive to give it to assessee or not, but so long as scheme subsisted, assessee had right to demand CCS. scheme, it was true, could be altered or varied by Government but that was inherent in legislative- cum-executive power of Government. While scheme subsisted, right of citizen to get CCS was guaranteed and it would be protected by Courts and vested rights of citizen under CCS scheme had to be honoured. learned counsel of assessee was, therefore, not justified in pleading that CCS was of different genre from that of import entitlements and duty drawbacks and that Hon'ble Calcutta High Court had erred in not perceiving this alleged distinction, which was, in fact, totally illusory. 9.3 It was also wrong to urge that Hon'ble Calcutta High Court had been misdirected in presuming that contents of letter dated 17-8-1966, issued by Ministry of Commerce, Government of India, were same as those of circular letter dated 24-8-1966 issued by Export Promotion Council to its members. There was no misdirection in this regard as contents Council to its members. There was no misdirection in this regard as contents of two letters were indeed identical. letter dated 24-8-1966 stated, inter alia, as follows: "The Government have since announced new scheme under which exporters will get cash assistance against exports effected from 6th June 1966." letter dated 17-8-1966 also said same thing, when it stated that Government of India have decided to grant cash assistance against exports effected from 6-6-1966. contents of two letters, were, thus, in no way different and prima facie, criticism of judgment of Calcutta High Court on this illusory presumption, was unfounded. 9.4 said decision pointed out by learned departmental representative was not only correct but was based on good authority and was, therefore, binding on Tribunal, particularly when there was not one judgment of any High Court to contrary. If, at all, every High Court, before which similar problem had come, had taken identical stand, as is manifest form various decisions referred to above. Even Three Member Bench of Calcutta Benches of Tribunal had taken above view by two to one majority, and it was confirmed by Hon'ble Calcutta High Court in Jeewanlal (1929) Ltd.'s case (supra). It was, therefore, urged that we should follow aforementioned authorities. order of Delhi Bench in case of Gedore Tools (I.) (P.) Ltd. was opposed to all above authorities and has been rendered under impact of misrepresentations and need not, therefore, be followed, more particularly when it did not consider numerous case laws, in particular Handicrafts & Handloom Export Corpn.'s case of Delhi High Court, referred to above, and was deprived of their guidance. 9.5 As regards request of learned counsel for assessee that case be referred to Special Bench of Tribunal, learned departmental representative submitted that request was wholly misconceived and against law and, in fact, amounted to call for abdication of duty on part of this Bench, when all High Courts were unanimous in their opinion and there was no dissenting judgment of any High Court, there was no occasion, whatsoever, to refer matter to Special Bench. There was no provision in law to do so. If at all, law was that Tribunal must follow unanimous decisions of various High Courts. Reference was made in this connections to decision of Hon'ble Delhi High Court in case of All India Lakshmi Commercial Bank Officers' Union v. Union of India (1984) 150 ITR 1, wherein their Lordships have held that law laid down by High Court, even of another State, should be respected. 10.1 We have given careful consideration to facts of case and rival submissios. What is clear from broad survey of case law above, is that receipt in question can be either trading or non-trading and if it is non- trading receipt, it is not includible in business income even though it might have been given (i) to meet losses of business, as in cases of Handicrafts & Handloom Export Corpn. (supra) and Handicrafts & Handloom Export Corpn. of India (supra), (ii) or to enable assessee to run its business more economically, as in case of Siddhartha Publications (p.) Ltd. (supra) and (iii) towards meeting cost of construction of one's capital works, as in case of Seaham Harbour Dock Co. (supra). In case of non-trading receipt, its mode of utilization by assessee, whether on revenue account or capital account, is entirely immaterial. it never reaches him, as trader and so cannot be his income, even when he utilizes it in his business. That is principle of Seaham Harbour Dock Co.'s case (supra). first question, therefore, to be asked fin case, is, as Lord Buckmaster pointed out, 'was this trade receipt? ' If so, it will be includible in assessee's business income, otherwise, not. It will be trade receipt if it is given to him for ulterior purpose, as, for example, 'with idea that by its use, men might be kept in employment', it will not be trading receipt. Similarly, pure bounty or gift, which is not correlated with carrying on of his business and does not come to him as something related with his business transactions, or with business, as whole, would be non-trading receipt, given may be, as gift, because of love and affection (as in case of Handicrafts & Handloom Export Corpn. (supra)) or as act of phianthropy as in case of Siddhartha Publication (P.) Ltd. (supra). But, when as payment is made by Government as subsidy to business or industry qua his capacity as businessman or industrialist, with view to enable him to run his business, it would be trade receipt, simpliciter. That is clearly ratio of Pontypridd and Rhondda Joint Water Board's case (supra) reiterated very pointedly in Handicrafts & Handloom Export Corpn.'s case (supra), by Hon'ble Delhi High Court. 10.2 it was with view to distinguish trade receipt from non-trade receipt that Hon'ble Calcutta High Court had evolved principle in Jeewanlal (1929) Ltd.'s case (supra) and noted earlier at para 7.7(a) (supra). It bears repetition in interest of continuity and so we reproduce it here, once again, for ready reference, as below: ".... It appears to us that what is decisive in these matters is nature of business, nature of income and nature of right to receive and also relation inter se, that is key to resolve issue in light of general principles which are to be followed in such cases.... " (p. 458) This test is not in replacement of test laid down in case of Seham Harbour Dock Co. (supra) as presumed by learned counsel for assessee, but in elaboration of it, and has been arrived at after noting ratios of both cases of House of Lords, viz., Pontypridd & Rhondda Joint Water Board (supra) and Seaham Harbour Dock Co. (supra). It income received is not related with business done, as in Seaham Harbour Dock Co.'s case (supra), i t will not be trading receipt. Similarly, even if income is related with business but recipient has no right to receive it, as in case of Siddhartha Publications (P.) Ltd. (supra) or Handicrafts & Handloom Export Corpn. (supra) receipt will again be non-trading receipt. In order to be trading receipt, it is necessary to establish that income is related (i) with business and (ii) also with right to receive it. If income responds to above description, it will be trade receipt. To regard, therefore, above test as in derogation of test laid down in Seaham Harbour Dock Co.'s case (supra), is, in our opinion, entirely erroneous. It is in elaboration of it and has been evolved after considering available case law on subject, and does, therefore, provide proper basis to evaluate nature of receipt, and we will respectfully adopt it. 10.3 Once receipt is held to be trade receipt, its further classification, viz., whether it is on revenue account or on capital account would become germane. If it is given on capital account, it will not forrm parrt of of business income. Such is nature of subsidy, for example, give to person to set up business in backward areas. Such subsidy is clearly of capital nature and has been consistently held so by all Benches of Tribunal. But if it is given to enable person to run his business more profitably as in case of Dhrangadhra Chemical Works Ltd. (supra) or to compensate him for loss that he will incur on account of Government directive to pay higher wages, as in case of Ratna Sugar Mills Co. Ltd. (supra) or to induce him to start early crushing of sugarcane, as in case of H. R. Sugar Factory (P.) Ltd. (supra) or to export his goods and to enable him to run his export business more competitively in international market and to hold his own there as in cases of Swadeshi cotton Mills co. Ltd. (supra) Ahmedabad Mfg. & Calico Printing Co. Ltd. (supra), Hindustan Lever Ltd. (supra) and Wheel & Rim Co. of India Ltd. (supra), receipts will be on revenue account. 10.4 Let us, therefore, examine true nature of CCS in light of above principles. predecessor of CCS was, as noted earlier, cash subsidy, which was notified by Central Government to Export Promotion Council vide its letter dated 17-8-1966 - see para 3.2 (supra). It was to be given as certain percentage of f. o. b. value of specified engineering goods exported from 6-6-1966 onwards, and there was to be 'no concessional supply of iron and steel' to those who got cash subsidy as above. Such supply was being earlier given vide Special Export Promotion Scheme, 1963. Cash subsidy was, thus, in lieu of scheme of 'concessional supply of iron and steel.' purpose of this scheme was to reimburse part of assessee's cost of manufacturing exported goods. Earlier, assistance was in kind. But now it was in cash. But purpose was same. subsidy was, thus, meant to reimburse part of cost of manufacturing exported goods and had t h e additional merit of being linked directly with export business of assessee, as it was computed as certain percentage of f. o. b. value. assessee had right to receive cash subsidy and this right was enforceable in law as has been explained by their Lordships of Hon'ble Supreme court in case of Anglo Afghan Agencies (supra). It was entirely beside point, in this connection, as their Lordships pointed out in that case, to debate as to whether right to receive cash assistance was statutory right, having its roots in section 3 of Imports and Exports Control Act or whether it was equitable right arising from doctrine of promissory estoppel. It was enforceable right under law, either way. following observation of their Lordships may gainfully be extracted at this stage to bring out law on point: "Granting that it (i. e., Export Promotion Scheme for Woollen Textiles) was executive in character, courts have power in appropriate cases to compel performance of obligation imposed by schemes upon departmental authorities. It could not be said that executive necessity releases Government from honoring its solemn promises relying on which citizens have acted to their detriment... Even assuming that provisions relating to issue of trade notices offering inducement to prospective exporters were in character executive, Union Government and its officers were not entitled at their mere whim to ignore promises made by Government. authority vested in Textile Commissioner by rules even though executive in character, was from its very nature authority to deal with manner in manner consonant with basic concept of justice and fair- play, if he made order which was not consonant with basic concepts of justice and fair-play his proceeding was open to scrutiny and rectification by courts. " Similar view has been expressed by Hon'ble Supreme Court in case of Shri Ambica Mills Ltd. No. 1 (supra). Referring to Cash Assistance Scheme, presently under consideration, their Lordships observed, inter alia, as follows: ".... These are schemes intended by Government for benefit of country and, therefore, any person would be entitled to take advantage of that scheme and be entitled to subsidy or assistance promised by Government... " (p. 1086) Thus, right to receive cash assistance in terms of scheme of Government announced by letter dated 17-8-1966, supra, was enforceable legal right and could not be arbitrarily rejected by Government. Its character is, therefore, far different from that of sum given to Siddhartha Publications (P.) Ltd.'s case (supra) by worldwide partnership, for that was payment not against enforceable right but mere gratis and so could not be regarded as trade receipt. Similar was position in case of Seaham Harbour Dock Co. (supra). There too, grant-in-aid was received by company not by exercise of right to receive it, but because unemployment grants committee pleased to give it. Both above receipts w e r e , therefore, non-trading receipts. But same in not true of cash assistance, promised by Government of India, in terms of its letter dated 17- 8-1966 supra. One received cash assistance as matter of right. Thus all tests laid down in Jeewanlal (1929) Ltd. case (supra) get fulfilled in case of cash assistance, and, there can be no doubt that it was trade receipt. 10.5 Cash assistance, in course of time, came to be known as 'Cash Compensatory Support'. As noted earlier, Export Policy Resolution was adopted by Government of India in 1970. In this resolution, Government indicated its objective of further improving competitive ability 'of Indian industry', 'though' it pointed out, 'the main responsibility in this regard rested with producing units, Government will, however, provide necessary assistance to build up efficient production, and, in meanwhile, endeavor to compensate exports for temporary handicaps that stem from transitional difficulties inherent in developing economy....' Out of various schemes devised in pursuance of above resolution, CCS, was one-see para 3.5 supra. Its object, as that of other schemes was to increase competitiveness of Indian industry so that they may compete in international market 'on strength of their own inherent efficienty'. Now, what is meaning of this objective? To compete in international market, or for that matter in any market, one has to develop capacity to supply quality goods at lower prices, and yet make reasonable profit. If one's cost of production is above international competitive prices, one will soon get out of business, if one sold goods at said prices for which he would incur losses or one would not sell at all if incurring of loss was to be avoided. Given competitive prices in international market, only other variables that had to be adjusted were (i) cost of production, and (ii) quality of goods. Even quality of goods was more or less fixed due to international competition. To sell Indian product in international market, one had to ensure that its quality was of international standard 'export quality' as they popularly say. Thus, in effect, only variable which was amenable to internal manipulation was cost of Indian products. All assistance schemes, whether long term or short term, were, therefore, targeted to this end. look at said schemes listed in paras 3.3, 4.1 to 4.4 and 5 will confirm this position. Whether it was Import Replenishment Scheme or Duty Drawback Scheme, exemption from sales tax on exports or provisions of cheap credit and cheap insurance for exports, all aimed at reducing costs. Competitiveness of India exports could be increased only in this manner. CCS also aimed at doing it. It was its professed purpose. For fixing it measure, whatever factors might be taken into account, they will not in law determine nature of CCS. Its real nature is to be determined with reference to purpose for which it is given, that nature of cash assistance and CCS is same was in unambiguous terms explained by Government in its letter dated 23-1-1976 referred to in para 3.6 supra. CCS, thus, clearly aimed at subsidizing cost of production, and to wipe out or reduce export losses or increase export profits by keeping cost of production low. In this regard, its nature was same as that of cash subsidy given by Government to offset increase in cost of production due to increase in wages in case of Ratna Sugar Mills Co. Ltd. (supra) or to offset losses caused due to Government directive to begin sugarcane crushing season early in case of H. R. Sugar Factory (P.) Ltd. (supra). 10.6 That this was purpose of granting cash assistance was under stood by industry also. Thus, in its letter dated 11-5-1978, Engineering Export Promotion Council wrote authorised representative of Income-tax Department at Calcutta, inter alia, as follows: "We would confirm that after devaluation of rupee,.... Government announced cash assistance scheme for compensation loss to exporters for exports of engineering goods from country..." (p. 454) 10.7 To sum up, therefore, we hold that real purpose of granting CCS was to increase competitive ability of Indian exporters and to augment their competitive ability which, in effect, meant assistance in reducing costs and i t s payment was directly related to export effort of individual. One received it only if one was doing export business of specified engineering goods, no other factor made him eligible for it. It was, thus, purely trade receipt, receive by trader in course of his business for purpose of making it more competitive in international market. receipt was not gratuitous but was governed by proper rules and regulations and every citizen had right to enforce his claim under it. receipt was, thus, entirely trade receipt on revenue account and following authorities clearly support above proposition: Pontypridd and Rhondda Joint Water Board's case (supra), Handicrafts & Handloom Export Corpn.'s case (supra), Ahmedabad Mfg. & Calico Printing Co.'s case (supra), Wheel & Rim Co. of India Ltd.'s case (supra), Hindustan Lever Ltd.'s case (supra), Swadeshi Cotton Mills Co. Ltd.'s case (supra) and Jeewanlal (1929) Ltd.'s case (supra). Similar principle has also been enunciated in following cases: Ratna Sugar Mills Co. Ltd.'s case (supra), H. R. Sugar Factory (P.) Ltd.'s case (supra) and Dhrangadhra Chemical Works Ltd.'s case (supra). It will be appropriate at this stage to draw attention once again to observations of Hon'ble Delhi High Court in case of Handicrafts & Handloom Export Corpn. (supra) which have been extracted by us in extenso in para 8.1 supra, particularly where they lay down following test: ".... subsidies given by Government to enable assessee to carry on its export business more efficiently and satisfactorily were part of trading receipts... " (p. 596) observations and principle contained in above test fully cover facts of present case and CCS received by assessee. ratio of Jeewanlal (1929) Ltd.'s case (supra), is also identical and there is, therefore, no reason for us not to follow above decisions. 10.8 Not one judgment has been shown to us, which might have taken contrary view. Referring to Ahmedabad Mfg. & Calico Printing Co. Ltd.'s case (supra) and Wheel & Rim Co. of India Ltd.'s case (supra), learned counsel for assessee had, however, urged that above cases started with concession that cash compensatory support was income derived from export business and, therefore, their Lordships' observations would not decide controversy whether CCS was or was not trading receipt. above submission, though plausible, does not appear to us to be entirely correct. question for determination before their Lordships was, whether cash subsidy and profit made on account of import entitlement were 'profits and gains derived from export of goods.' While answering this question, their Lordships held that whereas profits attributable to import entitlements would not be profits and gains, derived from foreign business, as connection between such profits and foreign trade was only mediate and not immediate. "So far as cash subsidy or allowance by Government is concerned, it poses no difficulty. In our opinion, such subsidy or allowance should be held to be directly connected with export of goods. It was on account of export of goods made by assessee-company that cash subsidy or allowance was given.... " (p. 633) These are relevant observations and have been made after duly considering nature and character of cash subsidy and its relation with export business. We cannot, therefore, agree with assessee that these authorities are not relevant. 10.9 (a) main plank in arguments of learned counsel for assessee, as noted earlier, was based on ratio or decision of House of Lords in that case of Seaham Harbour Dock Co. (supra). facts of this case have been brought out in detail in para 7.3(b). When we compare facts of said case with those of present case, we, however, find that there is no similarity whatsoever between two. In that case, said company was constructing new dock and while arranging for finances to meet to cost of construction it found that there was some shortfall. Unemployment Grants Committee was, therefore, approached in matter to give some grant, with help of which company would complete its construction and also incidentally keep some labourers usefully employed in construction work and said committee will be spared need to grant doles to unemployed. grant was, accordingly, given. said company credited said receipts in its revenue account and Crown taxed it accordingly. company's plea before Rowalt, J., and, thereafter, before Court of Appeal was that receipt was on capital account and not on revenue account. This plea was accepted by Court of Appeal. Against this judgment, Crown went to House of Lords and it was therefor, first time, that question was raised on which whole case turned, namely, 'was this trade receipt? ' answer was in negative by Lord Buckmaster, and, in course of his judgment, it was pointed out by him that'.... it (i. e., grant) was paid to and received by Dock Co. without any special allocation to any particular part of their property, either capital or revenue...' Lord Atkin elaborated this point further and observed, inter alia, as below: "It is receipt which is given for express purpose, which is named, and it has nothing to do with their trade... It appeals to me, with respect, to be quite irrelevant whether money when received is applied for capital purposes or is applied for revenue purposes....' 10.9 (b) Thus, finding of House of Lords, was that grant was not trade receipt, and since it was not trade receipt, it was irrelevant to enquire as to how it was utilized. If it were trade receipt, question, whether receipt is on capital account or revenue account would become relevant and it is here that finding of Court of Appeals becomes relevant, namely, that grant was to meet cost of construction and, hence, of capital nature. On either reasoning, receipt was not taxable in that case. What is position in present case? receipt is, as noted earlier, in course of business and for purpose of business and backed by enforceable right to receive it. It is, therefore, trading receipt. Is it on capital account as would be position on facts of case of Seaham Harbour Dock Co. (supra)? Again, answer is, no. assessee exports specified engineering goods and with reference to f. o. b. value of exports, it gets CCS at rate of 10 per cent. This payment is towards making goods more competitive and increasing sales payment is towards making goods more competitive and increasing sales thereof in international market. It is, thus, clearly on revenue account, linked directly with sales, though not part of sale proceeds as such, but in pari mateia with same and accruing and arising at moment of sales themselves subject, of course to putting in of claim and its verification by concerned authorities. 11.1 In view of what we have said above, it is not necessary in our opinion, to examine alternative contention of assessee, based on order of Commissioner (Appeals) referred to in para 7.8 supra. Besides, said order is sub judice and it will not be proper for us to comment upon it, particularly when we have given detailed reasons for our opinion. entire CCS and not part of it is taxable, for it is not aggregation of various computations, but integrated, indivisible whole, whose assessability will depend on its nature and character and not how its measure was determined. 11.2 discussion, on this subject, may not be complete, unless we express our opinion regarding criticism of decision of Hon'ble Calcutta High Court by learned counsel for assessee, as noted by us above in para 7.7. We have already expressed our opinion regarding criticism mentioned in para 7.7(a) and 7.7(d) in para 10.4 and 10.2, respectively. We are in entire agreement with submissions made by learned departmental representative in respect of assessee's criticism referred to in para 7.7(b) letter dated 17-8-1966 has been written by Ministry of Commerce, Government of India to Engineering Exports Promotion Council, intimating to council, Government's decision regarding granting of cash assistance. Circular letter dated 24-8-1966 is communication from council to its members and other manufacturers informing them Government decision as above. There is no variation in communication dated 24-8-1966 compared to contents of letter dated 17-8-1966. Apparently, learned counsel had misread letter dated 24-8-1966. May be he confused it with letter dated 11-5-1978 referred to in para 10.6 supra. Similarly, decisions of Hon'ble Supreme Court in Shri Ambica Mills Ltd. (No. 1)'s case (supra) and in Bengal Textiles Association's case (supra) cannot be read as laying down proposition that subsidies received from Government by was of CCS were not trading receipts. criticism of learned counsel (noted in para 7.7(c) supra) was based entirely on illusory grounds and erroneous perceptions and has to be categorically rejected. We entirely endorse in this respect reasoning of revenue as recorded in para 9.1 supra. We, accordingly, reject it. decision of their Lordships, as we have noted above, was based on ample authority and sound logic and we are duty bound to follow it. 12.1 Before we close, we may refer to request of learned counsel for assessee to refer present appeal for adjudication of Special Bench of Tribunal, in case we were not inclined to follow order of Division Bench, Tribunal, Delhi, relied upon by assessee and referred to in para 7.7(e) supra. We do not find it possible to accept above request for two reasons as below: (i) As noted earlier, not one judgment of any High Court has been brought t o our attention, which might have taken view contrary to that taken by us above. On contrary, learned departmental representative, has brought to our attention catena of case law, which directly support principles applied b y us. In this regard, particular mention has been made by us of observations of Hon'ble Delhi High Court, in case of handicrafts & Handloom Export Corpn. (supra), at page 596, quoted in extenso at para 8.1, supra on which we have, inter alia, placed reliance in formulating our view as above, vide para 10.7 supra. We cannot ignore law as laid down by Hon'ble Delhi High Court. above observations of Hon'ble Delhi High Court, as also case law in Dhrangadhra Chemical Works Ltd.'s case (supra), Wheel & Rim Co. of India Ltd.'s case (supra), H. R. Sugar Factory (P.) Ltd.'s case (supra), Ratna Sugar Mills Co. Ltd.'s case (supra), Ahmedabad Mfg. & Calico Printing Co. Ltd.'s case (supra), Swadeshi Cotton Mills Co. Ltd.'s case (supra) and Anglo Afghan Agencies' case (supra) were not brought to attention of our learned brothers in above mentioned case. They could not, therefore, have benefit of guidance from above case law. But, we having noted same, cannot but act in conformity with them. There can be no occasion in such situation, to refer matter to Special Bench, there being no doubt on subject. (ii) There is, then, decision of Hon'ble Calcutta High Court in Jeewanlal (1929) Ltd.'s case (supra) and law laid down by Hon'ble Delhi High Court in case of All India Lakshmi Commercial Bank Officers' Union (supra). Wherein their Lordships have clearly laid down as follows: "... income-tax authorities acting anywhere in country, however, have to respect law laid down by High Court, whether of State in which they are functioning, or of different State in absence of any contrary decision of any other High Court... " (p. 7) In view of this dictum, we have no option but to follow decision of Hon'ble Calcutta High Court in Jeewanlal (1929) Ltd.'s case (supra) which is admittedly on all fours with facts of present case. learned counsel for assessee had tried to persuade us that above observations applied only to 'income-tax authorities' and not to Tribunal. We, however, do not agree. reference to income-tax authorities in above decision has been made because it were they, who had acted against above principle. But said principle is equally valid for appellate authorities, including Tribunal, for it is wholesome principle of guidance while interpreting All India Statute. We are, therefore, bound to follow above decision of Hon'ble Calcutta High Court. position being, thus, self evident, there is no justification, in our opinion, to refer matter to Special Bench of Tribunal as urged by learned counsel for assessee. 12.2 In view of what we have stated above, we refrain to go into wider question raised by learned departmental representative regarding legal basis or lack of it, of such action. 13. In light of discussion above, we confirm order of learned Commissioner (Appeals) and dismiss present appeal. *** RELIANCE INTERNATIONAL CORPORATION LTD. v. INCOME TAX OFFICER