subsidy

If there is a discontinuance of business then sum received by partners after discontinuation would be taxed as income in the hands of recipient; receipts under the arbitration award, by the partners after dissolution of the firm would ordinarily be capital receipts in their hands when received. Full Article

India may move to a dual Goods and Services Tax (GST) regime next year, but the Cenvat (excise duty) related exemptions, especially area-based ones, will not be withdrawn at one go for ushering in the new tax system. The Finance Ministry is not in favour of doing away with all the Central excise exemptions, numbering about 330, as part of the switchover to the GST regime. Full Article

The state of Punjab has challenged in the Supreme Court the validity of Union government notification giving concessions in taxes and also providing subsidy to the new as well as existing industries in the states of Jammu and Kashmir, Himachal Pradesh and Uttarakhand. Contending that such concessions provided on selective basis would adversely affect the industrial development of Punjab, the state government prayed for quashing of these notifications as null and void. Full Article

The assessee filed a revision petition u/s 264 in which it claimed that the subsidy received by it from the government was a capital receipt and not chargeable to tax in view of P.J. Chemicals Ltd 210 ITR 830 (SC). The Petition was allowed by the CIT. Subsequently, the Supreme Court held in Sahney Steel and Press Works 228 ITR 253 that the subsidy received by that assessee was a revenue receipt. Pursuant to this judgement, the CIT passed a rectification order u/s 154 by .. Full Article

The Supreme Court (SC) last week set aside the judgement of the division bench of the Madras high court in a case raising the question of the power of the Income Tax authorities to ‘rectify mistakes’ in assessment under Section 154 of the Income Tax Act. Full Article

The word waiver does not fall into either of the three terms subsidy, grant and reimbursement used in Explanation 10 to section 43(1) of the Income-tax Act, 1961 or proviso thereof; where plant and machinery were already existing prior to taking the loan, it could not be inferred that it was given to meet the cost of plant and machinery; once, the amount of loan waived by the lender, could not be related to purchase of plant and machinery, it could not be reduced from th.. Full Article

The State Government had declared a new category of Mega Projects under the Package Scheme of Incentives (PSI) 2001 by Government Resolution, I.E. & L. D. dated 02.06.2005. The State Government has also declared the Industrial, Investment and Infrastructure Policy – 2006 so as to ensure sustained industrial growth, further improvement in the investment climate in the State and provide a global competitive edge to the State’s industry and promote employment and balanc.. Full Article

Exporters of traditional items including textiles, gems & jewellery, handicraft and leather — hit hardest by the slowdown in the Western markets — may get access to cheaper credit to tide over the current global meltdown. The commerce department and the finance ministry are discussing an incentive package for identified labour-intensive export sectors, which could include provision of credit at a subsidised rate and for a longer period. Incentives may also be given t.. Full Article