JCIT (OSD) Vs Kute Sons Dairys Ltd. (ITAT Pune)
ITAT Pune held that receipt of government grant-aid after commencement of cold chain facility is nothing but subsidy for running business more profitably or meeting daily business expenses and hence the same is considered as revenue receipt and thus taxable.
Facts- The assessee is a limited company engaged in the business of Unit manufacturing homogenized and pasteurized milk and manufacturing of milk products like Ghee Butter, milk powder and other milk products.
During the course of assessment proceedings, the Assessing Officer noted that the assessee has received Rs.2,50,00,000/- as government grant-in-aid on 04.07.2015. AO observed that assessee- company has completed and commenced the cold chain facility and subsequent thereto, grant-in-aid was received which is nothing but revenue receipt and brought the same to tax by adding the same to the total income of the assessee within the meaning of sec.28(iv) of the Act.
CIT(A) deleted the addition. Being aggrieved, revenue has preferred the present appeal.
Conclusion- Held that if the subsidy’s purpose was to help the assessee to run the business more profitably or meet daily business expenses, then it is to be considered as a revenue receipt and thus taxable.
