TMI Blog2014 (5) TMI 586X X X X Extracts X X X X X X X X Extracts X X X X ..... pt in the hands of the Assessee has to be determined with respect to the purpose for which the subsidy is given - The purpose test has to be applied - The point of time at which the subsidy is given is not relevant - The source is immaterial - The form of subsidy is immaterial - The main condition and with which the Court should be concerned is that the incentive must be utilized by the Assessee to set up a new unit or for substantial expansion of existing unit - If the object of the subsidy scheme is to enable the Assessee to run the business more profitably, then, the receipt is on the revenue account – no substantial question of law arises for consideration – Decided against Revenue. - Income Tax Appeal No. 2646 of 2011 - - - Dated:- 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring an Appeal to the Income Tax Appellate Tribunal. 4. Mr.Naniwadekar, learned counsel appearing for the Respondent/ Assessee, would urge that the question raised in this Appeal is fully covered by the judgment of the Division Bench of this Court in the case of Commissioner of Income Tax v/s Chaphalkar Brothers reported in (2013) 351 ITR 309 (Bom.). He submits that the predecessor in title was given the incentive so as to set up a new industry. If the industry was to be set up and established and the incentive was given by the State Government through its Industrial Corporation, then, as the Division Bench held, the purpose of same is relevant factor. If the object is to enable the Assessee to set up a new unit, then, the receipt of sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, it was directly credited to the capital receipt reserve account. The Assessee claimed the receipt as a capital receipt. It is that stand of the Assessee which was not accepted by the Assessing Officer. The matter was carried in Appeal and the Assessee succeeded. 6. We are of the opinion that repeatedly the Revenue has misunderstood and misconstrued the nature of receipts. Whenever new industries are to be set up in the State, there are incentives offered by the State Governments. They are offered directly or through some canalizing agencies like SICOM. Initially, they are termed as loan, but later on converted into incentive and offered with a view to enable the Assessee to set up a new unit. Then, despite the Honourable Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue account. On the other hand, if the object of the assistance under the subsidy scheme was to enable the Assessee to set up a new unit, then, the receipt of subsidy was on the capital account. 7. We do not find any justification for the Revenue questioning the concurrent findings of fact in the present case. The concurrent findings of fact do not raise any substantial question of law. There is no perversity in rendering such findings and the purpose of assistance given by the Government through SICOM. In such circumstances the Revenue should not have questioned the concurrent orders in the case of the present Assessee. Once undisputed facts point towards the object and that being to enable the Assessee to set up a new unit, then, the m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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