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2014 (7) TMI 172 - ITAT KOLKATAInterest subsidy received under the Technology Upgradation Fund Scheme – Revenue receipt or not – Held that:- The decision in Commissioner of Income-tax Versus Sham Lal Bansal [2011 (1) TMI 409 - PUNJAB AND HARYANA HIGH COURT] followed - interest subsidy received under TUF Scheme is capital in nature - assessee is engaged in manufacture and sale of woolen garments - It received subsidy for repayment of loan taken for building, plant and machinery under the Credit Linked Capital Subsidy Scheme under Technology Upgradation Fund Scheme (TUFS) of Ministry of Textiles, Government of India - the objective of the subsidy scheme was to enhance the technology apparatus of the assessee by assisting in acquiring machinery and further that the subsidy so received was utilized for repayment of loans taken by the assessee to set up the new unit, as was the intention of the subsidy. The purpose of scheme under which the subsidy is given id to sustain and prove the competitiveness and overall long term viability of the textile industry, the concerned Ministry of Textile adopted the TUFS scheme, envisaging technology upgradation of the industry - For determining whether subsidy payment was ‘revenue receipt’ or ‘capital receipt’, character of receipt in the hands of the assessee had to be determined with respect to the purpose for which subsidy is given by applying the purpose test - in order to sustain competitiveness in the domestic as well as international markets and overall long-term viability of the industry, the concerned Ministry adopted the TUFS scheme envisaging Technology Upgradation of the Industry - the subsidy received in this regard falls into capital field – Decided in favour of Assessee. Set off of unabsorbed depreciation - Unabsorbed business from 100% EOU – Held that:- CIT(A) rightly followed the decision of the Tribunal of the same assessee in the earlier assessment year, the business loss and depreciation loss in respect of the 100% EOU unit shall be set off against the profits of other units – Decided against Revenue.
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