Assessee treated grants as capital receipts and credited them to capital reserve account. Assessing Officer treated grants\/contributions received during the year and accrued but not received as revenue receipts and added them to total income. CIT(A) affirmed the order of the Assessing Officer. On appeal, the Tribunal held that the assessee was a contractor executing projects handed over by the State Government via Government Resolutions (GRs) and grants\/contributions were in the nature of investments made by the State Government, i.e., promoter, for infrastructure development. Further, assessee credited depreciation of projects to the capital reserve since assessee was not owner of the projects.\u00a0 Tribunal held that since grants\/contributions by State Government could not be considered as a support extended for day-to-day business activities of assessee, but was a capital contribution by State Government towards cost of projects to be incurred by assessee, grants\/contributions received by assessee and accrued but not received were capital in nature being a promoter’s contribution and, therefore, could not be treated as income of assessee. (AY. 2006-07)<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 4: Charge of income-tax-Capital or revenue-Grants-Capital reserve account-Road project-Infrastructure development-Grants\/contributions from State Government for completion of road projects undertaken by it on BOT basis-Grants\/contributions were a capital contribution by State Government towards the cost of projects-Not taxable as revenue receipts. [S. 28(i), 145] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[21],"tags":[],"class_list":["post-61261","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-fW5","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/61261","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=61261"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/61261\/revisions"}],"predecessor-version":[{"id":61262,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/61261\/revisions\/61262"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=61261"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=61261"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=61261"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}