Examine and state with brief reasons as to taxability or allowability or treatment to be given in each of the following independent cases while computing income under the head "Profits and gains from business or professi

As per section 2(24)(xviii) of the Income tax Act, 1961, assistance in the form of subsidy or grant or cash incentive by the Central Government or a State Government or any authority or body or agency in cash or kind is chargeable to tax as income. ICDS-VII specify that Government grants should not be recognized until there is reasonable assurance that (i) the person receiving it shall comply with the conditions attached to them; and (ii) the grants shall be received by such person. However, recognition of such grant shall not be postponed beyond the date of actual receipt. Since power subsidy has been received by the assessee, it is revenue in nature and chargeable to tax in A.Y. 2020-21.