Assessee's Grant from Holding Company Not Exempt; Must Declare as Income if Utilization Deducted, Section 56(2) Not Invoked.

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....Grant received from holding company as capital receipt - AO has not specifically invoked section 56(2). The dubious method adopted by the assessee of claiming the utilisation of grant as deduction from taxable income without offering the corresponding grant as income cannot be brushed aside on the claim that it is not debited to profit and loss account. As in substance the assessee is claiming the utilisation of grant as deduction in the computation of income. - The amount received from the holding company cannot be allowed to be treated as exempt if the utilisation out of it is allowed as deduction from the total income chargeable to tax. The assessee cannot treat the grant as its not taxable income and at the same time claim utilisation out of it as a deduction from total income. - AT....