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2014 (8) TMI 800 - AT - Income TaxNature of receipts – Revenue or Capital u/s 28(iv) - Whether the sum received on account of sales tax subsidy is revenue receipt or capital receipt – Held that:- The assessee was awarded an entitlement certificate under Rule 28C of the Haryana General Sales Tax Rules, 1975 - This certificate entitled the assessee to a tax concession for a period of ten years - Following the decision in Commissioner of Income Tax, Madras Versus Ponni Sugars & Chemicals Ltd.[2008 (9) TMI 14 - SUPREME COURT ] - CIT(A) had correctly came to the conclusion that the subsidy viewed from the angle of the provisions of Section 25A of the Haryana General Sales Tax Act, 1973 read with Industrial Policy 1999 of the Government of Haryana, the subsidy receipt in question are part of capital receipt given by the State Government for the purpose of meeting the objectives of Industrial Policy 1999, viz to attract new investment and to ensure growth of existing industries so that they can generate employment in industrial and allied sector by 20% - The entire package of incentives should be read as focusing on providing incentives for investment of industrial sector to achieve effective, meaningful and speedy development of the state - the assessee’s retention out of the sales tax collected on sale of finished products from expanded unit is part of capital receipt under the subsidy scheme of the Govt. of Haryana. The subsidy viewed from the angle of provisions of section 25A of the Haryana General Sales Tax Act read with Industrial policy 1999 of the Govt. of Haryana, are part of capital receipt given by the State Govt. for the purpose of meeting the objective of Industrial Policy 1999 to attract investment and to ensure growth of the existing industries so that they can generate employment in industrial and allied sector by 20% It was held that the entire package of incentive and concession should be read as focusing and providing incentive for investment of industrial sector to achieve effective, meaningful and speedy development of the State – the AO is directed to allow the claimed sale tax subsidy receipt received by the assessee during the year as capital receipt for the assessment – Decided in favour of assessee.
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