https://www.taxtmi.com/highlights?id=95426 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 en-us Fri, 26 Dec 2025 07:18:36 +0530 Fri, 26 Dec 2025 07:18:38 +0530 TaxTMI RSS Generator https://www.taxtmi.com/highlights?id=95426 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 Highlights Income Tax Fri, 26 Dec 2025 07:18:36 +0530 https://www.taxtmi.com/highlights?id=95426