The Tax Publishers2020 TaxPub(DT) 5453 (Ahd-Trib)

INCOME TAX ACT, 1961

Section 4

Purpose/object of interest subsidy under Technology Upgradation Fund Scheme was to encourage setting up of new industrial units and expansion of existing industrial units and, therefore, receipt of interest subsidy was clearly on capital account. Accordingly, subsidy was capital receipt not chargeable to tax.

Income - Capital or revenue receipt - Interest subsidy under Technology Upgradation Fund Scheme (TUFs) for textile and Jute Industries -

Assessee, an Exporter of Cotton made UPS, Fabrics, Yarns, etc., manufacturing of Denim Fabrics, Textile Material and Garments received interest subsidy under Technology Upgradation Fund Scheme (TUFs) for textiled and Jute Industries. AO treated interest subsidy as revenue receipt and brought the same to tax. Held: Purpose/object of interest subsidy under Technology Upgradation Fund Scheme was to encourage setting up of new industrial units and expansion of existing industrial units. The receipt of interest subsidy was clearly on capital account. Accordingly, subsidy was capital receipt not chargeable to tax.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :


INCOME TAX ACT, 1961

Section 254(1)

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