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2015 (7) TMI 784 - HC - Income TaxNature of receipt - Refund of excise duty claimed from DGFT - Business receipt or capital gain - whether is not income under Section 5 read with Section 28(iii)(b) in the hands of Assessee Company as held by ITAT? - Held that:- Character of the receipt of subsidy in the hands of the Assessee under the scheme had to be determined with respect to the purpose for which the subsidy was granted. 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 would be capital account”. It was clarified that “the form or the mechanism through which the subsidy is given are irrelevant. This Court concurs with the views expressed by the CIT (A) and the ITAT that any refund or drawback would go to ultimately reduce the cost of the project and had therefore to be treated as a capital receipt. See Challapalli Sugars Ltd. v. CIT [1974 (10) TMI 3 - SUPREME Court] and CIT v. Bokaro Steel Ltd [1998 (12) TMI 4 - SUPREME Court] - Decided against revenue.
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