Sales Tax Subsidy Treated as Capital Receipt Because It Was Linked to Capital Investment

Vardhman Textiles Ltd. Vs CIT (Punjab and Haryana High Court) The Punjab and Haryana High Court decided a batch of appeals involving common issues arising from an order of the Income Tax Appellate Tribunal (ITAT), Chandigarh, relating to Assessment Year 2000–2001. The appeals were filed under Section 260A of the Income Tax Act, 1961 challenging the Tribunal’s order dated 25 January 2008. The appellant sought the setting aside of the Tribunal’s decision. When the appeal was admitted earlier, several questions of law were framed, including the nature of sales tax subsidy granted under a St...