commencement of production in the
assessee‟s factory. The subsidies are operational subsidies and
not capital subsidies.
*********** ****************
In the case before us, the subsidies have ... capital expenditure and
therefore, the subsidy is capital, would not be justified. The specific
provision for capital subsidy in the main scheme and the lack
being in the nature of SubsiDy.
It has been claimed by the assessee that the subsidy is a capital receipt and not liable ... respect of notional sales tax liability holding it as capital subsidy?"
14. It is now necessary for us to refer to the Tribunal
General Sales Tax Rules, 1975 granted tax concession by way of capital subsidy equal to 50% of sales tax collected from customers in respect ... including central sales tax and conversion of the same to capital subsidy, computed on the sale of goods (including bye-products and waste) manufactured
before such failure;
(ii) An industrial unit availing the benefit of capital subsidy
may, in the prescribed manner, change over to deferment of
payment ... fixed year: 50%
capital capital
investment investment
B 125% of 100% of 10 Ist
fixed fixed year:80%
years
capital capital 2nd and 3rd
investment
subsidy amount is not allowed.
7. On appeal by the assessee the CIT(A) held that the subsidies were capital subsidies
not chargeable ... utilization of the funds received as
subsidy, the subsidy is to be viewed as capital in nature having regard to the
judgment
production. Hence, it was difficult to hold these subsidies
as anything but operational subsidies. These subsidies
were given to encourage setting up of industries ... production
in the assessee s factory. Hence, the subsidies were
operational subsidies and not capital subsidies.
Page 13 of 33
ITA No.3428/Mum/2016
actually being paid on the additional capital borrowed
shall be the only basis for computation of Capital Investment
Subsidy. In case of Capital Investment Subsidy ... grant 5% of the interest
subsidy, and 25% of the employment/wage subsidy 45% Up-Front subsidy’
under the Scheme. The said Form 2 also
including central sales tax and
conversion of the same to capital subsidy,
computer on the sale of goods (including
by-products and waste) manufactured ... capital investment (FCI)
and the unit shall be required to pay only the
balance of tax after deducting the rebate and the
capital subsidy plus
also related to the transport subsidy. He, therefore, directed the Assessing Officer to treat the transport subsidy as capital receipt. Now the department ... shares the burden of the capital outlay the same cannot but be brought to capital account because the capital sum if expended solely
interest on Fixed
Deposits made by the assessee out of capital subsidy received from the
Government of India under Rajiv Gandhi Gramin Vidyutikaran Yojana ... subsidy and the same thus was in the nature of capital receipt
being capital subsidy received from the Government of India, Ministry of
Power
