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2008 (8) TMI 351 - HC - Income TaxRevenue receipt or capital receipt – amount received as incentive and production incentive bonus received from govt. - we are of the view that where the incentive has been given to an assessee only for expansion of the plant and machinery of the industry, run by the assessee, or for the purposes of payment of term loan received by the assessee from the Government of India or financial institutions, the amount of incentive is nothing but a capital receipt. However, if such amount received by the assessee is permissible to be used, or used in day-to-day business of the assessee, the receipts earned by the assessee by selling the additional quantity of the levy sugar as free sugar cannot be said to be capital receipt and the same is nothing but revenue receipt of the assessee. – Further it is held that the production incentive bonus is deductible
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