https://www.taxtmi.com/caselaws?id=448148 Grant-in-aid received as reimbursement of expenditure for expansion of a food processing unit was treated as capital receipt because the subsidy was linked to capital investment and the purpose test showed it was meant to meet plant and machinery cost. The character of the receipt depended on the object of the scheme, not the timing or form of payment, and reimbursement of already incurred capital did not make it revenue in nature. The amount was also reduced from the written down value of fixed assets, aligning with the statutory treatment of subsidies connected to actual cost. The subsidy issue was decided in favour of the assessee, with partial relief on the remaining ground. en-us Tue, 19 Dec 2023 00:00:00 +0530 Thu, 11 Jan 2024 11:02:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=448148 Grant-in-aid received as reimbursement of expenditure for expansion of a food processing unit was treated as capital receipt because the subsidy was linked to capital investment and the purpose test showed it was meant to meet plant and machinery cost. The character of the receipt depended on the object of the scheme, not the timing or form of payment, and reimbursement of already incurred capital did not make it revenue in nature. The amount was also reduced from the written down value of fixed assets, aligning with the statutory treatment of subsidies connected to actual cost. The subsidy issue was decided in favour of the assessee, with partial relief on the remaining ground. Case-Laws Income Tax Tue, 19 Dec 2023 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=448148