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2019 (3) TMI 1721 - HC - Income TaxSubsidy or incentive - characterization of income - capital or revenue receipt - HELD THAT:- Tribunal has simply referred to the subsidy scheme without specifying the scope, purport or the details of it. Simply because the subsidy scheme has been declared by the Tribunal to be capital receipt in the case of other assessees, it pronounced the decision in this case that it was to be treated as such. In our view, that was not the correct approach. The subsidy scheme had to be analysed threadbare. The question whether the subsidy incentive was being utilized for the purpose of meeting the interest liability of the company on loans and advances taken by it to set up its plant and machinery had to be investigated and a firm conclusion ought to have been arrived at. Only if it was so utilized, possibly, the subsidy incentive could be described as a capital receipt. Otherwise it had to be treated as a revenue receipt. We remand the matter back to the Tribunal to decide this particular issue upon hearing the parties and by a reasoned order within three months from the date of communication of this order. Tribunal will not be bound by its earlier factual finding on any scheme for subsidy/incentive whatsoever and will make its own enquiry and decision on the scheme in question and come to a legal conclusion. The impugned order of the tribunal on this issue is set aside.
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