Dismissing the appeal of the revenue the Court held that, according to the West Bengal Incentive Scheme, 2000 and the West Bengal Incentive to Power Intensive Industries Scheme, 2005 the subsidies were granted with the sole intention of setting up new industry and attracting private investment in the State of West Bengal in the specified areas which were industrially backward and hence the subsidies were of the nature of non-taxable capital receipts. Thus according to the “purpose test” laid out by the Supreme Court and the High Courts the subsidy should be treated as a capital receipt in spite of the fact that the computation of “power subsidy” was based on the power consumed by the assessee. Once the purpose of a subsidy was established, the mode of computation was not relevant. The mode of computation of form of subsidy was irrelevant. The mode of giving incentive was reimbursement of energy charges. The nature of subsidy depended on the purpose for which it was given. The entire reason behind receiving the subsidies was for setting up of a plant in the backward region. Therefore, the incentive subsidies of interest subsidy and power subsidy received by the assessee were “capital receipts” and not “income” liable to be taxed in the assessment year 2010-11. The amendment to the definition of income under section 2(24) wherein sub-clause (xviii) has been inserted including “subsidy” for the first time by the Finance Act, 2015 with effect from April, 2016, i.e., assessment year 2016-17 .Receipts not being nature of income cannot be included for purpose of computing book profit .   (AY.2010-11)