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2017 (4) TMI 916 - AT - Income TaxRevision u/s 263 - assessment order treating the subsidy from the Government of Maharashtra as capital receipt is erroneous and prejudicial to the interest of the Revenue - Held that:- Now subsidy given by the Central Government or a State Government or any authority etc. for any purpose, except where it is taken into account for determination of the actual cost of the asset under Explanation 10 section 43(1), has become chargeable to tax. Even if a subsidy is given to attract industrial investment or expansion, which is a otherwise a capital receipt under the preamendment era, shall be treated as income chargeable to tax, except where it has been taken into account for determining the actual cost of assets in terms of Explanation 10 to section 43(1). This amendment is patently prospective. As the assessment year under consideration is 2008-09, section 2(24) (xviii) shall have no operation. In view of the foregoing discussion, we are satisfied that the subsidy received by the assessee from the Government of Maharashtra is a capital receipt and accordingly not chargeable to tax. It is a settled legal position that if two views are possible on a particular point and the Assessing Officer has taken one of such possible views, it is not open to the CIT to treat the assessment order erroneous and prejudicial to the interest of the Revenue and impose the other possible view as against the one canvassed by the Assessing Officer. The discussion made in the preceding paras amply shows that the view taken by the AO in treating subsidy received from the Maharashtra Government as a capital receipt, in any case, being a possible view, cannot be interfered with in the proceedings u/s 263 of the Act. We, therefore, set aside the impugned order. - Decided in favour of assessee.
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