By Jagdish D. Shah
Jagdish T. Punjabi
Chartered Accountants
DCIT vs. Cinemax Properties Ltd. (Mumbai)
Members : P. K.
Bansal (VP) and Pawan Singh (JM)
ITA No.
5227/Mum/2015
A.Y.: 2011-12.
Date of Order: 09th August, 2017
Counsel for revenue
/ assessee: Saurabh Deshpande / None
FACTS
The
Assessing Officer, while assessing the total income of the assessee, disallowed
the claim of entertainment tax of Rs. 6,45,79,148 collected and claimed as
capital subsidy.
Aggrieved,
the assessee preferred an appeal to the CIT(A) who allowed the appeal filed by
the assessee.
Aggrieved,
the revenue preferred an appeal to the Tribunal.
HELD
The
Tribunal noted that the similar issue arose in the case of the assessee in the
assessment years 2007-08, 2008-09, 2009-10 and 2010-11.
The
Tribunal in ITA No. 394/Mum/2012 dated 24.01.2014 for AY 2008-09 while dealing
with the same issue held the amount under consideration to be capital in
nature. The Tribunal had while deciding the appeal noted that the Bombay High
Court has in the case of CIT vs. Chaphalkar Brothers (ITA Nos. 1342
& 1443 of 2006), order dated 08.06.2011, held that the subsidy of this kind
constitutes capital receipt as it is meant for promotion of new industries by
way of multiplex theatres. The Tribunal also noted that in the case of
assessee’s sister concern namely Vista Entertainment Pvt. Ltd. (ITA No.
8402/Mum/2011) for AY 2008-09, it has been held that similar additions are not
sustainable, since the same amount is capital in nature. Following these
decisions, the Tribunal had dismissed the revenue’s appeal for AY 2008-09 and
had decided the issue in favour of the assessee. This order for AY 2008-09 was
followed while deciding appeals for AY 2009-10 and AY 2010-11.
Facts
being the same, the Tribunal did not find any illegality or infirmity in the
order of the CIT(A) deleting the addition of Rs. 6,45,79,148.
The
appeal filed by the revenue was dismissed.
