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Unnatural expansion of definition of "income" seems beyond power conferred to tax income under the Constitution of India. A new chapter of REAL TAX TERRORRSIM by NAMO Sarkar to counteract judicial pronouncement to include capital receipts in meaning of income.

Unnatural expansion of definition of income seems beyond power conferred to tax income under the Constitution of India. A new chapter of REAL TAX TERRORRSIM by NAMO Sarkar to counteract judicial pronouncement to include capital receipts in meaning of income. - Income Tax - Direct Tax Code - DTC - By: - CA DEV KUMAR KOTHARI - Dated:- 1-6-2015 - Vide the Finance Act, 2015, the definition on income has further been expanded by inclusion of sub-clause (xviii) in clause (24) of section 2 of the Incom .....

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ome, and item of receipt which is a capital receipt and which cannot be called income in any manner can be taxed as income? The answer to this must be a big NO, because a capital receipt cannot be made income just by including it in meaning of income Effective part of amendment in definition of income is as follows: Definitions. 2. In this Act, unless the context otherwise requires,- (24) income includes- 91[(xviii) assistance in the form of a subsidy or grant or cash incentive or duty drawback .....

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include the following: assistance in the form of: a subsidy or grant or cash incentive or duty drawback or waiver or concession or reimbursement …. by whatever name called. If it is given by : the Central Government or a State Government or any authority or any body or any agency it can be given in any form like: in cash or in kind to the assessee But the following will not be included in income: Any subsidy or grant or reimbursement which is taken into account for d .....

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government. And not any other person, authority, body or agency. Capital subsidy for business / industries exempted - if deducted from actual cost of asset: Capital subsidy received by any business or industry for business purposes will not be effected by the amendment, if the subsidy is deducted from the actual cost of asset, on which depreciation is to be claimed. Therefore, if an assessee claims that subsidy should not be deducted from actual cost, then he will have to include amount of subsi .....

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ndment itself recognises the aspect that such receipt is capital receipt, therefore, an exception has been made as discussed above. It is the government authorities, who un-necessarily raises disputes on this aspect. After such un-necessary disputes, now position is well settled by many judgment of the Supreme Court. Once disputes have been settled, now amendment has been made to counteract those judgments. Gifts received, though of capital nature have been deemed as income, in most of situation .....

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