The Tax Publishers2019 TaxPub(DT) 8167 (Chd-Trib) : (2019) 202 TTJ 0750

INCOME TAX ACT, 1961

Section 4

The purpose of interest subsidy was upgradation of plant and machinery and thus capital apparatus of assessee-company and the same was definitely not for the purpose of day-to- day business of assessee, accordingly, subsidy was in the nature of capital receipt.

Income - Capital or revenue receipt - Interest subsidy received under the TUF Scheme of the Government of India - The purpose of TUF Scheme being to induce entrepreneur to undertake investment in modernizing plant and machinery and assets

Assessee received interest subsidy received under the TUF Scheme of the Government of India. The purpose of TUF Scheme was to induce entrepreneur to undertake investment in modernizing the plant and machinery. AO taxed the subsidy amount as revenue receipt.Held: The purpose of interest subsidy was upgradation of plant and machinery and thus capital apparatus of assessee-company and the same was definitely not for the purpose of day-to-day business of assessee. Accordingly subsidy was in the nature of capital receipt.

Relied:CIT v. Sham Lal Bansal, ITA No. 472 of 2010, CIt v. Gloster Jute Mills Ltd. (2018) 96 Taxmann.com 303 (Cal) : 2018 TaxPub(DT) 5370 (Cal-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2002-03 to 2005-06

INCOME TAX ACT, 1961

Section 244A

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