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Inox Leisure Ltd. Versus Deputy. Commissioner of Income tax, Circle 1 (2) , Baroda and Vica-Versa

2016 (5) TMI 960 - ITAT AHMEDABAD

Addition on account of ESOP - Held that:- The Hon’ble High Court of Madras in the case of PVP Ventures Ltd. [2012 (7) TMI 696 - MADRAS HIGH COURT] has allowed such claim as business expenditure and the Hon’ble High Court of Delhi in the case of Lemon Tree Hotels Ltd. [2015 (11) TMI 404 - DELHI HIGH COURT] has followed the decision of the Hon’ble High Court of Madras held that cost of ESOP could be debited in Profit and Loss account of the assessee.

Treatment of entertainment tax exem .....

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t cost of prints cannot be included in the cost of acquisition of the exhibition rights in the film. Therefore, what can be carried forward are the cost of acquisition and not the cost of prints. In our considered opinion, the cost of prints has to be allowed in the year in which the expenditure is incurred. It is irrelevant as to what treatment the assessee has given in its books of accounts as held by the Hon’ble Supreme Court in the case of Tuticorin Alkali Chemicals & Fertilizers Ltd. [1997 .....

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to A.Y. 2008-09 and ITA Nos. 2302 & 2552/Ahd/2012 are cross appeals of the assessee and the revenue directed against the very same order of the ld. CIT(A)-I, Baroda dated 22.08.2012 pertaining to A.Y. 2009-2010. 2. In the impugned appeals of the assessee and the revenue, the grievance is common in both the years; therefore, all these appeals were heard together and are disposed of by this common order for the sake of convenience. We first take up ITA No. 374/Ahd/2012 Assessee s appeal for A .....

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as a charge to Profit and Loss account in respect of such remuneration to employees. The assessee furnished a complete computation of the claim which is incorporated in the assessment order by the A.O. at para 7 from page 4 to page 8 of the assessment order. After considering the claim and the computation made by the assessee, the A.O was of the opinion that the assessee has not incurred any expenditure. The A.O further observed that no payment is made by the assessee either in this year or any .....

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Ltd. in ITA No. 2817 & 2877/Ahd/2011. The ld. counsel further stated that the Hon ble High Court of Madras and the Hon ble High Court of Delhi have decided similar issue in favour of the assessee and against the revenue. Per contra, the ld. D.R. could not bring any distinguishing decision in faovur of the revenue. 7. We have carefully considered the orders of the authorities below. We find force in the contention of the ld. counsel. The Co-ordinate Bench in the case of the Cera Sanitaryware .....

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07/2015 has followed the decision of the Hon ble High Court of Madras held that cost of ESOP could be debited in Profit and Loss account of the assessee. Respectfully following the aforementioned decisions, we direct the A.O to allow the claim of deduction on account of remuneration to ESOP. Ground No. 1 is accordingly allowed. ITA No. 523/Ahd/2012 Revenue s appeal for A.Y. 2008-09 9. The first grievance of the revenue relates to the treatment of entertainment tax exemption in respect of multipl .....

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ment years i.e. A.Y. 2003-04, 2004-05, 2005-06, 2006-07 and A.Y. 2007-08, the entertainment tax has treated as a revenue receipt. The A.O further found that the First Appellate Authority in all the previous years has decided the issue in favour of the assessee. Since the revenue has preferred appeals before the Tribunal, the A.O treated the entertainment tax as a revenue receipt. 11. Aggrieved by this, the assessee carried the matter before the ld. CIT(A). After considering the facts and the sub .....

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he copies of the orders. The ld. D.R. could not bring any binding decision in favour of the revenue. 14. We have gone through the orders of the authorities below qua the issues. There is no dispute that the A.O has made the additions based upon the findings given in earlier assessment years. It is also an undisputed fact that in earlier assessment years, the issue has been decided in favour of the assessee and against the revenue. The Hon ble High Court of Gujarat in Tax Appeal No. 110 of 2015 h .....

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peration, and therefore, revenue in nature? 15. While answering this question in favour of the assessee and against the revenue, the Hon ble Jurisdictional High Court considered its own decision in assessee s own case given in Tax Appeal No. 167 of 2012 decided on 08/01/2013 and following its own order. The Hon ble High Court thus concluded Under the circumstances, the appeal is meritless and deserves to be dismissed. Hence, dismissed but with the observation that if any view is taken by the Ape .....

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diture on prints treating it as capital expenditure. 18. While scrutinizing the return of income, the A.O found that the assessee has claimed expenditure on acquisition of distribution rights, print cost at ₹ 69,30,298/- as revenue expenditure. The A.O further found that the assessee had amortized it against the print distribution rights and contracts. The A.O noticed that the assessee has claimed print cost of ₹ 69,30,298/- as revenue expenditure. The A.O was of the firm belief that .....

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No ownership rights have been bestowed upon the assessee and, therefore, the claim has to be allowed u/s. 37(1) of the Act. After considering the facts and the submissions, the ld. CIT(A) was convinced that in respect of actual positive prints of the films exhibited under the distribution arrangement entered into by the assessee with various parties. As per the distribution agreement, prints were property of party selling distribution rights and not the assessee. Assessee had the right to use s .....

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