The HC ruled that excise duty exemptions granted to the...

The HC ruled that excise duty exemptions granted to the assessee's Rudrapur Plywood and MDF Units constituted capital receipts, not revenue receipts. Applying the purpose test from Sahney Steel & Press Works Ltd., the court determined that since exemptions were granted to industrialize Uttaranchal and Himachal Pradesh and generate employment, they qualified as capital receipts. Consequently, these exemptions were not chargeable to tax under normal Income Tax provisions. The court further held that such capital receipts could not be included in the computation of book profit under Section 115JB for Minimum Alternate Tax purposes. The appeal was decided in favor of the assessee.

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