JUDGMENT

Sen, J.-The question in this case is whether the subsidy received by the assessee-Company from the Andhra Pradesh Government is taxable as revenue receipt or not. It appears from the notification issued by the Andhra Pradesh Government that certain facilities and incentives were to be given to all the new industrial undertakings which commenced production on or after 1.1.1969 with investment capital (excluding working capital) not exceeding Rs. 5 Crores. The incentives were to be allowed for a period of five years from the date of commencement of production. Concession is also available for subsequent expansion of 50 per cent and above of existing capacities provided in each case, the expansion was located in a city or town or panchayat area other than that in which the existing unit is located. The incetives were :

"(a) Refund of sales tax on raw materials, machinery and finished goods, levied by the State Government subject to a maximum of 10 of the equity capital paid up in the case of public limited companies and the actual capital in the case of others;

(b) Subsidy on power consumed for production to the extent of 10 in the case of