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2014 (3) TMI 809 - HC - Income TaxPower tariff concession - Whether the Tribunal was right in law in holding that the Power Tariff Incentive received by the appellant from the Government is a revenue receipt liable to tax – Held that:- The decision in Sahney Steel And Press Works Limited And Others Versus Commissioner of Income-Tax [1997 (9) TMI 3 - SUPREME Court] followed - the basic test to be applied in judging the character of the subsidy - the character of the receipt in the hands of the assessee whether Revenue or capital has to be determined with respect to the purpose for which the subsidy was given and that the point of time at which it is paid, its source or its form were irrelevant - if the object of the subsidy was to enable the assessee to run the business more profitably then the receipt is on revenue 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 or to expand the existing unit, then the receipt of the subsidy was on capital account. The condition is not contingent upon establishment of the unit, but, for the purpose of assisting the assessee in carrying out the business operation and the subsidy is given subject to strict compliance of the conditions given in Notification No.G.O.Ms.No.29, Energy (A2), 31.01.1995 – Thus, the receipt has to be treated as Revenue receipt, as it is contingent upon the commencement of the production and to enable the assessee to run the business more profitably – Decided against Assessee. Deduction u/s 80HHC of the Act - Scrap sales - Whether scrap sales to be included in the total turnover for the purpose of deduction u/s 80HHC of the Act – Held that:- The decision in Commissioner of Income-tax Vs. Ashok Leyland Ltd. 2007 (2) TMI 151 - HIGH COURT, MADRAS] followed - both sides agree that scrap sales is not to be included in the total turnover for the purpose of computing the deduction under Section 80HHC of the Act – thus, the order of the Tribunal set aside – Decided in favour of Assessee.
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