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2017 (1) TMI 1198 - AT - Income TaxSubsidy receipt on account of industrial promotion assistance - capital or revenue receipt - nature of income - Held that:- Assessee company got the subsidy from the West Bengal Government in the form of Industrial Promotion Assistance under the West Bengal Incentive Scheme-2000. The said scheme clearly says that it is for the company to establish its unit in the backward area to promote the employment and other facilities in the backward areas and the said incentive was towards capital receipt in nature. The said scheme is not for the assessee company to reimburse the day to day operational expenses, therefore, it cannot be in the nature of revenue. Considering the factual position we are of the view that the Ld. CIT(A) has passed a reasoned order and it does not require any modification stating that the receipt receivable by the appellant company on account of industrial promotion assistance under West Bengal Incentive Scheme, 2000 is capital in nature. Hence, the said receipt is not includible in the taxable income of the appellant company. There is no application of provisions of section 41(1) as held by the AO as there was no cessation of liability on account of payment of sales tax. - Decided against revenue
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