TMI Blog2018 (2) TMI 2024X X X X Extracts X X X X X X X X Extracts X X X X ..... e subsidy, time of the subsidy is not relevant. According to the Hon'ble Supreme Court if the object of the subsidy scheme was to enable the assessee to run the business more profitably then the receipt was on revenue account - if the object of the subsidy was to set a new unit or to expand existing unit then such receipt is on capital account. Hence, it was held that the object for which the subsidy is given necessarily determines the nature of the subsidy. The form or the mechanism through which the subsidy is given is irrelevant. The ld CIT(A) has decided the issue based on the above decision of the Hon'ble Supreme Court. The ld CIT(A) has discussed the whole issue in para No. 4 of his order wherein, he has decided the issue a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see has claimed ₹ 267153041/- and ₹ 71748549/- exempt on account of VAT refunds and interest subsidy under TUFF. The ld Assessing Officer did not accept the claim of the assessee and held that this subsidy is revenue in nature. The ld Assessing Officer relied upon the decision of the Hon'ble Supreme Court in case of Sahaney Steel and Presswork Ltd Vs. CIT 228 ITR 253. The ld AO was also of the view that since assessment year 2008-09 the assessee itself was treating it as revenue receipt and offering the same for taxation and this is the first year where it is claiming to be capital receipt. Subsequently, the assessment order u/s 143(3) of the Income Tax Act was passed on 30.01.2015 at Nil income considering the sale tax subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'ble Supreme Court in case of CIT Vs. Pooni Sugars chemicals Ltd 306 ITR 392 has held that character of the receipt in the hands of the assessee has to be ascertained looking at the purpose for which the subsidy is provided. Therefore, Hon'ble Supreme Court held that for ascertaining the true character of the subsidy the purpose of the subsidy i.e. purpose test needs to be looked into. Hon'ble Supreme Court further stated that source of the subsidy, time of the subsidy is not relevant. According to the Hon'ble Supreme Court if the object of the subsidy scheme was to enable the assessee to run the business more profitably then the receipt was on revenue account. It was further held that if the object of the subsidy was to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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