2006 (12) TMI 549

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....ent(s) : 1, ORAL ORDER The following question has been proposed for the admission of this appeal: " Whether the Appellate Tribunal is right in law and on facts in holding that subsidy of Rs. 10,00,000/received by the assessee was capital in nature and accordingly deleting the addition made by the Assessing Officer?" While considering the factual aspect whether the amount was subsidy to....

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....tracting investments to generate greater employment in less industrially developed areas. With a view to secure balanced development of industries in Gujarat through dispersal of industries in the most backward areas and backward areas, the Government of Gujarat has approved a package of incentives. As a part of this package, Government of Gujarat has introduced this scheme. In this scheme, the as....

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....er of this subsidy in the hands of the recipient whether revenue or capital will have to be determined having regard to the purpose for which the subsidy is given. The source of the fund is quite immaterial. However, if the purpose is to help the assessee to set up its business or complete a project the monies must be treated as having been received for capital purposes. But if monies are given to....