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2017 (1) TMI 853 - HC - Income TaxNature of income - subsidy received as Excise Duty reimbursement - whether is not a revenue receipt? - Held that:- The subsidy scheme formulated by the Government of Bihar was for the purpose of attracting capital investment and to encourage setting up/expansion of existing units. Thus the object/purposes of the subsidy was for the purposes of encouraging capital investments in the State of Bihar. Consequently the impugned order holds that subsidy would be on Capital account and could not be considered to be on Revenue account.In fact this issue about the object/purpose of the subsidy deciding its character as revenue or capital is no longer res integra in view of the decision of the Supreme Court in CIT, Madras v/s. Ponni Sugars & Chemicals Ltd. (2008 (9) TMI 14 - SUPREME COURT ) Addition made to book profits on account of subsidy received by way of excise duty - Held that:- As we have already held that the subsidy received by the respondent-assessee from the State of Bihar was in the nature of capital receipt. Hence the same cannot be added to arrive at book profits of the respondent-assessee under Section 115J of the Act.
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