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TMI Blog2009 (12) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... is in the habit of releasing subsidy amount depending upon the budgetary allocation in each year. This court has come across in several cases that the State has released subsidy amount even after ten years of the commencement of the project. Therefore, the contention of the Revenue that since the assessee received the amount of subsidy after completion of the hotel project and commencing of the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disallowed by the Assessing Officer. Being aggrieved by the same, the assessee filed an appeal before the Commissioner of Income-tax (Appeals) which appeal came to be allowed holding that the subsidy has been granted to the assessee by the State as per the 1982-87/88 package of incentive and concessions and held that it is towards investment and not a revenue receipt. Accordingly, the appeal came ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ahney Steel and Press Works Ltd. v. CIT [1997] 228 ITR 253 which clearly held that such subsidy issued is treated as revenue receipt. (2) Whether the appellate authorities were correct in holding that the subsidy received should be treated as a capital receipt not liable to tax despite the assessee admitting that it was not utilised to purchase any capital asset." 4. We have heard the lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT [1977] 228 ITR 253, the Government was refunding the sales tax on the purchase of machinery, etc., after commencement of production to enable the assessee to run the business more profitably. Therefore, the hon'ble Supreme Court has taken such a decision. According to him, in the present case, based on the subsidy announced by the State Government to encourage the tourism, the hotel industry ..... X X X X Extracts X X X X X X X X Extracts X X X X
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