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2017 (2) TMI 1491 - AT - Income TaxCharacterization of income - Entertainment tax receipt - revenue receipt OR capital receipt - HELD THAT:- We find that the claim of subsidy at various Multiplexes from Serial No. 1 to 9 above have been accepted as capital receipt in earlier years. This has not been disputed by any of the lower authorities. The only dispute relates to the subsidy received from the Government of Rajasthan . It is also not in dispute that in pursuance of the terms of scheme introduced by the Government of Rajasthan to encourage construction of new cinema halls, assessee was running a cinema hall. It is also not in dispute that the assessee could receive the subsidy only after the fulfillment of the mandatory conditions. These facts have not been controverted by any of the lower authorities. Thus we direct the A.O. to treat the amount as a capital receipt. Disallowance u/s 14A r.w.r. 8D - HELD THAT:- It is not in dispute that the assessee has not received any exempt income during the year under consideration. The disallowance has been made on finding of the fact that the assessee has made certain investments out of borrowed funds. In our considered opinion, since the assessee has not earned any exempt income, no disallowance u/s. 14A read with Rule 8D is called for. Our view is also fortified by the decision of the Hon’ble High Court of Gujarat in the case of Corrtech Energy Ltd. [2014 (3) TMI 856 - GUJARAT HIGH COURT]held “that the Tribunal had recorded the finding of fact that the assessee did not make any claim for exemption of any income from payment of tax. Hence, no disallowance could be made u/s. 14A. Deduction of amortization of value of stock options to employees - HELD THAT:- As relying on First Appellate Authority derive support from the findings of the Special Bench of the Tribunal in the case of Biocon Ltd [2013 (8) TMI 629 - ITAT BANGALORE]amount being remuneration to employees by way of Employees' Stock Option Plan debited to profit and loss account is an allowable expenditure u/s 37(1).
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