29 October 2008
I have received Rs.648000/- as Credit Linked Capital Subsidy under TUFS(Technology Upgradation Fund Scheme).This Scheme is set up for Textile industry using Upgrade Technology. Technology levels are benchmarked in terms of specified machinery for each sector of textile industry. Machiney with techology levels lower than specified will not be permitted for funding under TUF Scheme. Now, my question is what is treatment of amt. recd under this Scheme? whether it is teaxble or not and under which section? Pl. Clarify.
29 October 2008
Seems it is an investment based subsidy. If it is so it is a capital receipt not liable to income tax as per the decision CIT Vs. P J. Chemicals ltd (1994) 210 ITR 830 (SC).Accordingly the subsidy should be reduced from the cost of the assets.
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