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2019 (7) TMI 1762 - AT - Income TaxCharacterization of income - treatment of subsidy received by assessee - capital or revenue receipt - HELD THAT:- The scheme of State of Jharkhand, wherein State Policy for Mega Projects was announced vide Notification No.2371 i.e. Jharkhand Mega Project Incentive Rules, 2005. The said scheme was promulgated to boost industrial development in the State of Jharkhand for setting up new industrial units or industrial units undertaking expansion, diversification and modernization on or after 15.11.2000. The purpose of above scheme was to establish new units in Jharkhand and hence purpose of scheme was in capital field i.e. to establish manufacturing unit in Jharkhand. Merely because the incentives were received in the form of sales tax waiver, would not change the purpose of grant of subsidy. The assessee has also received subsidy under the Maharashtra PSI 2007 Scheme for Jejuri plant. In view thereof, where the purpose of subsidy was to establish units, was in capital field, hence the subsidy received is capital receipt. We accordingly, reject the grounds of appeal raised by Revenue.
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