https://www.taxtmi.com/highlights?id=97581 Classification of a sales tax subsidy was determined by the purpose test: where an exemption is designed to encourage fixed capital investment and employment, linked to capital outlay and available for a limited period, its dominant object is to promote capital formation and not recurring operations. Time or manner of receipt is immaterial; the subsidy operates as an incentive for capital investment. Applying this principle, the court concluded the subsidy is a capital receipt and not taxable as revenue, and the challenge to retention by the assessee was rejected. en-us Wed, 11 Mar 2026 11:42:19 +0530 Wed, 11 Mar 2026 11:42:19 +0530 TaxTMI RSS Generator https://www.taxtmi.com/highlights?id=97581 Classification of a sales tax subsidy was determined by the purpose test: where an exemption is designed to encourage fixed capital investment and employment, linked to capital outlay and available for a limited period, its dominant object is to promote capital formation and not recurring operations. Time or manner of receipt is immaterial; the subsidy operates as an incentive for capital investment. Applying this principle, the court concluded the subsidy is a capital receipt and not taxable as revenue, and the challenge to retention by the assessee was rejected. Highlights Income Tax Wed, 11 Mar 2026 11:42:19 +0530 https://www.taxtmi.com/highlights?id=97581