Faceless assessment notice must cover specific prejudicial variations; unexplained final additions without notice breach section 144B and natural just...
The ITAT ruled in favor of the Revenue regarding the classification of government financial aid. Applying the "purpose test" established in Serum Institute of India Private Limited v. Union of India, the Tribunal determined that subsidies helping an assessee operate business more profitably or meet daily expenses constitute taxable revenue receipts, while those for establishing new units or expansion qualify as non-taxable capital receipts. The Finance Act, 2015 amendment to Section 2(24)(xviii) further clarified that all government assistance (subsidies, grants, incentives, etc.) constitutes taxable income unless specifically used to determine an asset's actual cost. Based on these principles, the Revenue's appeal was allowed.
The ITAT ruled in favor of the Revenue regarding the classification of government financial aid. Applying the "purpose test" established in Serum Institute of India Private Limited v. Union of India, the Tribunal determined that subsidies helping an assessee operate business more profitably or meet daily expenses constitute taxable revenue receipts, while those for establishing new units or expansion qualify as non-taxable capital receipts. The Finance Act, 2015 amendment to Section 2(24)(xviii) further clarified that all government assistance (subsidies, grants, incentives, etc.) constitutes taxable income unless specifically used to determine an asset's actual cost. Based on these principles, the Revenue's appeal was allowed.
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