ITAT Grants Relief To SRF Limited Treating Subsidy As Capital Receipt

The Income Tax Appellate Tribunal granted substantial relief to SRF Limited by deleting major additions made by the Assessing Officer and holding that CER and TUF subsidies constitute capital receipts rather than taxable revenue income. The Tribunal relied on the purpose test, observing that the subsidies were intended to encourage capital investment and modernization. This ruling reinforces settled principles on subsidy taxation and limits arbitrary revenue treatment by tax authorities.