10 October 2008
MY CLIENT HAS RECEIVED A GRANT AGAINST INSTALLATION OF NEW MACHINERY.WHEATHER IT IS TREATED AS REVENUE RECEIPTS? I HAVE HEARD THAT AS PER RECENT S.COURT DECISION WBIDC GRANT WILL BE TREATED AS REVENUE RECEIPTS AND IT WILL NOT BE CAPITALISED. IF YES PLEASE GIVE ME THE ACTUAL DECISION GIVEN BY S.COURT.
10 October 2008
In Sahney steel and press works ltd vs CIT (1997) 228 ITR 253(SC) grant received after commencement of production is decided as revenue receipt because the grant was actually reimbursement of sales tax, water charges,electricity charges etc based on a subsidy scheme of Andhra pradesh Government.According to me the said decision has no global application since subsidy scheme of all states are not uniform.In other words if it is a capital investment subsidy it is capital receipt vide CIT vs P J Chemicals ltd (1994) 210 ITR 830 (SC)