2009 (5) TMI 26

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..... le, claimed by the assessee as capital receipt but the AO has treated it to be revenue receipt - Order of the ITAT sustained in with tribunal held that the subsidy in question should be treated as capital receipt – revenue appeal dismissed
Hon'ble Prafulla C.Pant, J. Hon'ble B.S.Verma, J. JUDGMENT Prafulla C. Pant, J. (Oral) - Heard Sri Pitamber Maulekhi, learned Standing Counsel for the appe .....

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..... anj, decided on 26.3.2007. Paras 4, 5 and 6 of the Judgment of the said case are being reproduced below :- "4. The question quoted above can be answered only after examining the Incentive Scheme. In the first para of the said Scheme itself provides that the Scheme enabled sugar factories to become viable by utilizing the additional funds generated through such incentives for repayment of loans a .....

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..... as under:- "In the case before us, the subsidies have not been granted for production of or bringing into existence any new asset. The subsidies were granted year after year only after setting up of the new industry and commencement of production. Such a subsidy could only be treated as assistance given for the purpose of carrying on of the business of the assessee. Applying the test of Viscount S .....

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