The assessee claimed that the sale proceeds of MEIS licences constituted capital receipts not chargeable to tax. The Tribunal held that the benefit under the Merchandise Exports from India Scheme was a “reward” under the Foreign Trade Policy, 2015 and not a subsidy, grant, cash incentive, duty drawback, waiver, concession or reimbursement within the meaning of section 2(24)(xviii). Applying the purpose test, the Tribunal observed that the object of the scheme was to offset infrastructural inefficiencies and enhance export competitiveness rather than to supplement trading profits. Accordingly, the sale proceeds of MEIS licences were held to be capital receipts not chargeable to tax. The Assessing Officer was directed to verify the quantum before granting relief. (AY. 2017-18, 2018-19 & 2020-21).