ITAT treats fertiliser subsidy as capital receipts

The Mumbai Bench of the ITAT held that fertilizer subsidy received under the Government’s Nutrient Based Subsidy (NBS) Policy constitutes a capital receipt and is not chargeable to tax. 

The dispute arose from rectification proceedings under Section 154 concerning the taxability of fertilizer subsidy received under the Nutrient Based Subsidy Policy and the scope of limitation applicable to rectification applications filed after reassessment proceedings. 

The Tribunal further ruled that settlement of reassessment proceedings under the Direct Tax Vivad Se Vishwas Scheme does not render the reassessment order non est and that a rectification application under Section 154 can validly be maintained based on such reassessment order.