https://www.taxtmi.com/caselaws?id=305035 Subsidy received as refund or exemption of excise duty and sales tax/VAT under the Kutch incentive schemes was held to be a capital receipt, because the decisive factor was the object of the scheme. The incentives were designed to encourage setting up new industrial units and promote development and employment in the notified area, so their linkage to production or their disbursement after commercial operations began did not change their character. The timing and mechanism of payment were irrelevant where the purpose was to induce establishment of the unit. As a result, such receipts were not taxable as income and additions treating them as revenue receipts could not be sustained. en-us Wed, 13 Jul 2016 00:00:00 +0530 Sat, 12 Nov 2022 09:13:12 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=305035 Subsidy received as refund or exemption of excise duty and sales tax/VAT under the Kutch incentive schemes was held to be a capital receipt, because the decisive factor was the object of the scheme. The incentives were designed to encourage setting up new industrial units and promote development and employment in the notified area, so their linkage to production or their disbursement after commercial operations began did not change their character. The timing and mechanism of payment were irrelevant where the purpose was to induce establishment of the unit. As a result, such receipts were not taxable as income and additions treating them as revenue receipts could not be sustained. Case-Laws Income Tax Wed, 13 Jul 2016 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=305035