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2023 (9) TMI 473 - AT - Income TaxNature of receipt - Taxability of entertainment tax subsidy received by the assessee - capital or revenue receipt - HELD THAT:- As decided in assessee own case [2022 (10) TMI 124 - ITAT DELHI] this issue of entertainment subsidy in case of multiplexes and theaters has been dealt by the jurisdictional High Court after analyzing the object and the purpose of the subsidy and came to the conclusion that it is a capital receipt. Also see Chaphalkar Bros [2017 (12) TMI 816 - SUPREME COURT]. Claim of Depreciation - Determination of cost of Acquistion - As 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. Payment of service tax - whether provision of service tax is an allowable deduction? - AO disallowed the claim of the assessee on the ground that liability being contingent and dependent on the outcome of the verdict of the Hon’ble Supreme Court on this issue - HELD THAT:- AO erred in treating the liability being contingent. It is undisputed fact that amount of liability is clear, since 50% of such liability was directed to be paid in three equal installments by the Hon’ble Supreme Court and for balance 50%, surety was required to be furnished. Therefore, we do not see any good reason for interfering into well reasoned finding of the learned CIT(Appeals), same is hereby affirmed. Ground of appeal is dismissed.
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