https://www.taxtmi.com/highlights?id=104739 The purpose test for subsidy receipts requires examination of the scheme's operative provisions rather than its nomenclature, source, form or payment timing. Electricity subsidy under the Pondicherry power subsidy scheme was payable after production and calculated as a percentage of actual energy charges. Because it directly reduced the cost of power used in manufacturing and was not linked or earmarked to capital expenditure or creation of a capital asset, it constituted operational assistance. The subsidy was therefore treated as a taxable revenue receipt rather than a capital receipt, and the appeal was dismissed. en-us Fri, 09 Oct 2026 11:18:49 +0530 Fri, 09 Oct 2026 11:18:48 +0530 TaxTMI RSS Generator https://www.taxtmi.com/highlights?id=104739 The purpose test for subsidy receipts requires examination of the scheme's operative provisions rather than its nomenclature, source, form or payment timing. Electricity subsidy under the Pondicherry power subsidy scheme was payable after production and calculated as a percentage of actual energy charges. Because it directly reduced the cost of power used in manufacturing and was not linked or earmarked to capital expenditure or creation of a capital asset, it constituted operational assistance. The subsidy was therefore treated as a taxable revenue receipt rather than a capital receipt, and the appeal was dismissed. Highlights Income Tax Fri, 09 Oct 2026 11:18:49 +0530 https://www.taxtmi.com/highlights?id=104739