Interest subsidy for repayment of loan acquired for acquisition of capital assets, is capital receipts

Brief of the Case ITAT Lucknow held in the case DCIT vs. M/s J.K. Cement Ltd. that certain conditions are made in the subsidy scheme, which is required to be fulfilled by the corporate sector in order to avail the benefit of subsidy. One such condition was that the subsidy amount is utilized for repayment of loans and there should not be any defaults in repayment of dues to the banks in respect of these loans. In the case of Ponni Sugars and Chemicals Ltd. 306 ITR 392 (SC), the apex court held that the nature of subsidy is to be determined in respect of purpose for the subsidy is granted. Furt...