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2022 (10) TMI 124 - AT - Income TaxTaxability of entertainment tax subsidy received by the assessee - Nature of receipts - HELD THAT:- While considering the nature and character of entertainment tax subsidy received by multiplexes/cinema hall owners under the very same Scheme the Hon’ble Apex Court in case of CIT Vs. Chapalkar Brothers [2017 (12) TMI 816 - SUPREME COURT] has held that the entertainment tax subsidy received is in the nature of capital receipt. In fact, in assessee’s own case in assessment years 2008-09 and 2009- 10 [2013 (6) TMI 73 - BOMBAY HIGH COURT] Hon’ble Bombay High Court while dismissing the appeals filed by the Revenue has upheld the decision of the Tribunal holding that the entertainment tax subsidy received by the assessee is in the nature of capital receipts. Further, in case of CIT vs. Bougainvillea Multiplex Entertainment Centre (P) Ltd. [2015 (2) TMI 21 - DELHI HIGH COURT] has expressed identical view. Undisputedly, Commissioner (Appeals) while deciding the issue has followed the ratio laid down in the decisions cited supra. That being the case, we do not find any infirmity in the order of learned Commissioner (Appeals) on this issue. Accordingly, the order is upheld and grounds raised by the revenue are dismissed. Entertainment tax subsidy is held to be capital in nature, whether, it will go to reduce the cost of acquisition of capital assets resulting in disallowance of depreciation claimed by the assessee on plant and machinery to that extent - Entertainment tax subsidy granted by the State Government is not for the purpose of utilizing on any particular or specified assets. That being the factual position emerging on record, the reasoning of the assessing officer that such subsidy would go to reduce the cost of assets is unacceptable. More so, when the revenue has failed to bring any material on record to demonstrate that the subsidy has actually gone to reduce the cost of any specified assets on which the assessee claimed depreciation. That being the factual position, no part of the subsidy can be reduced from the written down value to compute depreciation.
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