| COURT: | ITAT Mumbai |
| CORAM: | Ashwani Taneja (AM), Sanjay Garg (JM) |
| SECTION(S): | 41(1), 43(1), 50 |
| GENRE: | Domestic Tax |
| CATCH WORDS: | cessation, Depreciation, reimbursement of actual cost, remission, subsidy |
| COUNSEL: | Dr. K. Shivram |
| DATE: | November 26, 2015 (Date of pronouncement) |
| DATE: | January 29, 2016 (Date of publication) |
| AY: | 2008-09 |
| FILE: | Click here to view full post with file download link |
| CITATION: | |
| Subsidy granted to set up a wind project is a capital receipt. the subsidy cannot be reduced under Explanation 10 to s. 43(1) from the cost of the assets acquired though 100% depreciation is allowed on the cost of the assets. The subsidy is also not assessable either u/s 41(1) or u/s 50 | |
So far as the contention of the AO that the subsidy is liable to be taxed under section 50 of the Act is concerned, we find that in this case neither there was a transfer of any asset from the block nor did the block has ceased to exist. It is not a case of capital gains by way of transfer but it is only a case of capital receipt as observed above as an incentive by the state government to promote the generation of electricity through non conventional sources. In view of the above, in our view, the subsidy received by the assessee is not taxable under section 41(1) neither under section 43(1) and nor under section 50 of the Act
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