https://www.taxtmi.com/caselaws?id=197206 Sales tax and purchase tax subsidy under the Maharashtra incentive scheme was treated as capital receipt because the scheme was aimed at inducing establishment of units in notified backward areas, so the benefit was linked to setting up the unit rather than routine business operations. The ad hoc disallowance of royalty was deleted because no separate transfer pricing adjustment was made by the TPO, and the Assessing Officer could not sustain an addition merely on the basis of a show-cause notice. The royalty claim was also supported on merits, as the rate was within the approved range and no contrary material for a later year was shown. en-us Wed, 17 May 2017 00:00:00 +0530 Mon, 01 Jan 2018 18:51:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=197206 Sales tax and purchase tax subsidy under the Maharashtra incentive scheme was treated as capital receipt because the scheme was aimed at inducing establishment of units in notified backward areas, so the benefit was linked to setting up the unit rather than routine business operations. The ad hoc disallowance of royalty was deleted because no separate transfer pricing adjustment was made by the TPO, and the Assessing Officer could not sustain an addition merely on the basis of a show-cause notice. The royalty claim was also supported on merits, as the rate was within the approved range and no contrary material for a later year was shown. Case-Laws Income Tax Wed, 17 May 2017 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=197206