https://www.taxtmi.com/caselaws?id=67270 Subsidy under a State Investment Subsidy Scheme is characterised by its purpose: if it is designed to induce establishment of an industry and is linked to fixed capital investment, it is a capital receipt. Where the scheme excludes working capital, computes assistance by reference to fixed investment, and requires continued production for a stipulated period, the payment retains capital character even if sanction is finalised after production begins. A subsidy aimed at supporting post-commencement business operations would ordinarily be revenue in nature, but the operative test remains the object of the scheme rather than the source of funds or timing of approval. The subsidy was treated as a capital receipt and not taxable as revenue receipt. en-us Wed, 05 Oct 2005 00:00:00 +0530 Wed, 09 Mar 2011 18:10:03 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=67270 Subsidy under a State Investment Subsidy Scheme is characterised by its purpose: if it is designed to induce establishment of an industry and is linked to fixed capital investment, it is a capital receipt. Where the scheme excludes working capital, computes assistance by reference to fixed investment, and requires continued production for a stipulated period, the payment retains capital character even if sanction is finalised after production begins. A subsidy aimed at supporting post-commencement business operations would ordinarily be revenue in nature, but the operative test remains the object of the scheme rather than the source of funds or timing of approval. The subsidy was treated as a capital receipt and not taxable as revenue receipt. Case-Laws Income Tax Wed, 05 Oct 2005 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=67270