Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2018 (1) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (1) TMI 515 - HC - Income TaxAddition on account of disallowance of claim of VAT reimbursement - character of the subsidy in the hands of the assessee - nature of income - Revenue or capital receipt - Held that:- Any subsidy given by the Central Government or a State Government or any authority etc. for any purpose, except where it is taken into account for determination of the actual cost of the asset under Explanation 10 section 43(1), has become chargeable to tax. Even if a subsidy is given to attract industrial investment or expansion, which is a otherwise a capital receipt under the pre-amended era, shall henceforth be treated as income chargeable to tax, except where it has been taken into account for determining the actual cost of assets in terms of Explanation 10 to section 43(1). This amendment is with effect from 1-4-2016 and is prospective in its application. In the instant case, as the assessment year under consideration is 2009-10, Section 2(24)(xviii) shall have no operation. In light of above discussions and in the entirety of the facts and circumstances of the case, VAT subsidy received by the assessee from the Government of Bihar is a capital receipt and accordingly not chargeable to tax - Decided in favour of assessee.
|