Managerial remuneration disallowance under s.40A(2)(b) challenged over alleged tax-avoidance; appellate decision restored deletion of addition for dir...
Classification of imported goods as electronic cigarette versus tobacco product reversed for lack of proof; order set aside for jurisdictional overrea...
Reversal of input tax credit in proportion to exempt supply: specificity of show-cause notice required; order set aside, fresh proceedings allowed wit...
Grant-in-aid/subsidy received from the Government under a rehabilitation scheme was examined to determine whether it constituted a revenue receipt or a capital receipt. Applying the "purpose test", the financial assistance was held to be intended predominantly to rehabilitate the loss-making assessee by pulling it out of financial stringency, with the funds earmarked primarily for clearing loan liabilities. Performance-linked conditions were treated as monitoring mechanisms to ensure proper utilisation of rehabilitation assistance, not as indicators of a revenue character. Even assuming some performance objective, the dominant purpose of rehabilitation prevailed. Accordingly, the receipt was held to be a capital receipt not chargeable as revenue income, and the issue was decided against the revenue. - HC
Grant-in-aid/subsidy received from the Government under a rehabilitation scheme was examined to determine whether it constituted a revenue receipt or a capital receipt. Applying the "purpose test", the financial assistance was held to be intended predominantly to rehabilitate the loss-making assessee by pulling it out of financial stringency, with the funds earmarked primarily for clearing loan liabilities. Performance-linked conditions were treated as monitoring mechanisms to ensure proper utilisation of rehabilitation assistance, not as indicators of a revenue character. Even assuming some performance objective, the dominant purpose of rehabilitation prevailed. Accordingly, the receipt was held to be a capital receipt not chargeable as revenue income, and the issue was decided against the revenue. - HC
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