Case Law Details
Chaitanya Steelshape Vs ITO (ITAT Pune)
ITAT Pune held that subsidy received by the assessee is towards the investment made in the expansion of its industrial unit under the Package Incentive Scheme 2001 is ‘Capital’ receipts. Accordingly, the same is not taxable.
Facts- The assessee is a private limited company engaged in the business of manufacturing Press parts, Engineering goods, Fabrication, and Trading thereof. During the course of assessment proceedings, AO observed that the assessee received a subsidy of Rs.3,22,200/- in the year under consideration, which was taken to “Reserve and Surplus” in the balance sheet.
The AO opined that the amount of subsidy was transferred by the assessee to ‘Reserve and Surplus’ account, which indicated that it was not utilised for incurring or setting up a new unit or for expansion of the existing one.
CIT(A) did not provide any succour to the assessee, against which the extant appeal has been instituted.
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