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2015 (7) TMI 1298 - AT - Income TaxAssessment u/s 153A - disallowance of sales tax incentive - capital receipt or revenue receipt - Held that:- Assessee was justified in its claim that the sales-tax incentives received in terms of the Government scheme constituted the “capital receipt” and therefore, not to be taken into account in computation of total income. Since a view has been taken in respect of this very scheme by the respected Special Bench then we have no reason to take any other view but to follow the view already expressed in this precedent. In respect of subsidy in the shape of entertainment duty in the case of Chaphalkar Brothers [2013 (6) TMI 73 - BOMBAY HIGH COURT] has opined that the object of the subsidy was to promote construction of multiplex theatre complexes. Such receipt of subsidy was held on “capital account”. If object of subsidy scheme was to enable the assessee to run business more profitability, then receipt was to be considered as on “revenue account”. But if object of assistance under subsidy scheme was to enable the assessee to set up new unit, then receipt of subsidy is to be considered on “capital account”. In the said case it was found by the Hon’ble Bombay High Court that under the incentive package offered by the State Government was for the purpose of setting up a new industry in the State. The assessee had applied for such special capital incentive from SICOM. We are of the view that considering the scheme of the State Government, the assessee is entitled for the exemption of the sales-tax incentive being a capital receipt in the hands of the assessee and that the claim being lawful in nature ought to have been entertained by the Assessing Officer while completing the assessment under section 153A of I.T. Act. - Decided in favour of the assessee.
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