https://www.taxtmi.com/caselaws?id=787739 Whether a sales tax subsidy under a State Industrial Policy is a capital or revenue receipt was resolved by applying the purpose test: the dominant object of the grant governs its character, not timing or manner of payment. The policy linked subsidy benefits to fixed capital investment (including retention of sales tax for ten years, a ceiling tied to 300% of fixed capital investment, and location-based differentials), indicating the grant was consideration for capital investment. The Revenue's concession before the tribunal under Supreme Court precedent went unchallenged. Result: the sales tax subsidy is a capital receipt and the assessee's appeal succeeds. en-us Thu, 26 Feb 2026 00:00:00 +0530 Wed, 11 Mar 2026 08:18:14 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=787739 Whether a sales tax subsidy under a State Industrial Policy is a capital or revenue receipt was resolved by applying the purpose test: the dominant object of the grant governs its character, not timing or manner of payment. The policy linked subsidy benefits to fixed capital investment (including retention of sales tax for ten years, a ceiling tied to 300% of fixed capital investment, and location-based differentials), indicating the grant was consideration for capital investment. The Revenue's concession before the tribunal under Supreme Court precedent went unchallenged. Result: the sales tax subsidy is a capital receipt and the assessee's appeal succeeds. Case-Laws Income Tax Thu, 26 Feb 2026 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=787739