Project assistance received from a development authority for...

Project assistance received from a development authority for constructing and establishing water infrastructure is characterised by its purpose: assistance for project development is capital in nature, unlike operational assistance, which may be revenue. The note states that the Tribunal treated the assistance as a capital receipt and deleted the corresponding revenue addition, following its consistent prior approach. It also states that excess construction expenditure over capital assistance may be amortised over the concession period as deferred revenue expenditure where consistent with applicable accounting principles and CBDT guidance for infrastructure facilities. The disallowance of amortised project expenditure was deleted; interest and penalty issues were consequential and premature.