2015 (1) TMI 1412

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....entertainment duty collected by the assessee as "capital receipt" relying on the decision of the Hon'ble Bombay Court in the case of CIT V/s Chapahalkar Brothers without appreciating that the department has not accepted the said decision and has filed an SLP which is pending before the Hon'ble Supreme Court." Thus, the sole ground raised by the Revenue is that the decision of the Hon'ble Bombay High Court has not been accepted by the Revenue and SLP is pending against the said order. 4. Brief facts are that, the assessee is in the business of running multiplex theatres in the State of Maharashtra. The Maharashtra Government in order to encourage the setting up of multiplexes for viewing the movies granted exemption from payment of ent....

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....ted to supplement the profits of an industry, (i) the subsidy granted by the State of Maharashtra, is or the promotion of multiplexes, (ii) the subsidy was granted in the form of a concession on entertainment duty, (iii) that the object behind the subsidy was to promote construction of new cinema houses', (iv) the State Government had decided to grant the subsidy in view of the fact that setting up new multiplex complexes is highly capital intensive, with a long gestation period. 3.3.1. The Honble Bombay High Court relied on Ponni Sugars (306 ITR 392) Where The Hon'ble Supreme Court had explained its previous Judgement in Sahney Steel and Press Works Ltd V/s CIT (228 ITR 253) as under:- ....

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....ich it could be availed - the form in which it was granted was not relevant. The Hon'ble Bombay High Court held:- The fact that the subsidy was not meant for repaying the loan taken for construction of multiplexes cannot be a ground to hold that subsidy receipt was on revenue account, because, if the object of the scheme was to promote cinema houses by constructing multiplex theatres, then irrespective of the fact that the multiplexes have been constructed out of own funds or borrowed funds, the receipt of subsidy would be on capital account. 3.3.3. Following the decision of Hon'ble Bombay High Court as discussed above. this ground of appeal is allowed " . 5. The ld. DR admitted that this issue is covered by the dec....