TaxTMI 
TaxTMI 
2017 (2) TMI 1491
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....ny assessment proceedings, the A.O. noticed that the assessee has claimed entertainment tax as exempt in respect of its multiplexes at Vadodara, Mumbai, Brudwan, Jaipur Indore, Lucknow and Darjeeling aggregating to Rs. 10,69,89,058/-. The A.O. found that the same was treated as capital receipt not chargeable to tax. The A.O. further observed that in earlier assessment years i.e. A.Y. 2003-04 to A.Y. 2008-09. This receipt has been considered as a revenue receipt. The A.O. further observed that the assessee has succeeded before the ITAT for A.Y. 2003-04 to A.Y. 2005-06, though the revenue has preferred appeals before the Hon'ble High Court. Taking a leaf out of the previous history of the assessee, the A.O. made the addition of Rs. 10,69,89,058/-. 5. Assessee carried the matter before the ld. CIT(A) and reiterated its claim that the impugned receipt is a capital receipt. 6. After considering the facts and the submissions`, the ld. CIT(A) observed that his predecessor has decided similar issue from A.Y. 2003-04 to A.Y. 2009-10 in favour of the assessee except for the policy applicable to Multiplexes at Rajasthan in earlier years. The ld. CIT(A) further observed that the Tribunal....
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....- Sr.No Multiplex at Amount (Rs.) Brief 1 Baroda (Gujarat) 20,616,897 Held to be a capital receipt not exigible to tax for Assessment Years 20O3-04 to Assessment years 2009- 10 by CIT(A) and the same confirmed by ITAT, Ahmedabad for AY 2003-04 to 2005-06 2 Nariman Point (Maharashtra) 33,578,000 Held to be capital receipt not exigible to tax for Assessment Years 2006-O7 to 2009-10 by CIT(A). The applicable policy covered in favour of the appellant by IT AT, Ahmedabad's Common Order for AY 20O3-04 to AY2OO5-06 3 Burdwan (West Bengal) 3,050,769 Held to be a capital receipt not exigible to tax for Assessment year 2009-10 by CIT(A). The applicable policy covered in favour of the appellant by IT AT, Ahmedabad's Common Order for AY 2003-04 to AY 2005-O6 4 Lucknow (Uttar Pradesh) 14,656,794 Held to be a capital receipt not exigible to tax for Assessment Years 2008-09 to 2009-10 by CIT(A) 5 Indore (Madhya Pradesh) 5,656,806 Held to be a capital receipt not exigible to tax for Assessment Years 2006-07 to....
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....by providing such a subsidy in the form of entertainment tax for a particular period. A copy of notification issued in this regard was placed before the Assessing Officer. But the Assessing Officer did not agree with the assessee and treated said amount as its income. * The Commissioner (Appeals), however, accepted the plea of the assessee after re lying, inter alia, on the State Government's notification and deleted the entire addition by treating the entertainment subsidy as a capital receipt because said amount had been credited in the books of account of the assessee as a liability under the head "Capital Subsidy". * The Tribunal upheld the order of the Commissioner (Appeals). 13. And on appeal, the Hon'ble High Court held as under:- *In the instant case, it is more than apparent that the State Government proceeded to exempt entertainment tax for a period of 5 years payable by a "new" cinema hall constructed, subject to the condition that commercial exhibition of films in such cinema hall was required to be started by 31-3-2000. *In the scheme of the Rajasthan Entertainments and Advertisements Tax Act, 1957, where entertainment tax is ....
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....urn of income, the A.O. noticed that the assessee has made investment of Rs. 82,48,38,619/- in Fame India Ltd. The A.O. found that this investment was entirely funded by the assessee companies promoter and holding company by way of providing interest bearing loan of Rs. 132 crores and the interest paid on capital borrowed for acquisition of shares in a company would amount to earning exempt dividend income. Invoking the provisions of Section 14A of the Act read with Rule 8D, the A.O. computed the disallowance at Rs. 83,58,340/-. 17. Assessee carried the matter before the ld. CIT(A) but without any success. 18. Before us, the ld. counsel for the assessee vehemently stated that no disallowance can be made as the assessee has received no exempt income during the year under consideration. 19. We have carefully considered the orders of the authorities below. It is not in dispute that the assessee has not received any exempt income during the year under consideration. The disallowance has been made on finding of the fact that the assessee has made certain investments out of borrowed funds. In our considered opinion, since the assessee has not earned any exempt income, no disallo....
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....r form of compensating employees. As per the appellant ESOPs are issued to the employees only for the interest of the business so as to induce employee to work in the best interest of the Company. As per the appellant the allotment of shares was done by the Company in strict compliance with SEBI regulations, which mandates that the difference between the market prices and the price at which the option is exercised by the employees is to be debited to the Profit and Loss Account as expenditure. As per the appellant ESOPs are issued and valued in terms of ESOP scheme framed as per the SEBI guidelines. The appellant has submitted that in view of above, ESOP liability of Rs. 16,21,904/- be allowed as a deductible expense as the recognition of ESOP expenditure is in accordance with the SEBI guidelines. The appellant has relied upon decision of various Hon'ble Courts including the decision of Hon'ble ITAT, Bangalore (Special Bench) in the case of Biocon Ltd. Vs DCIT, reported in [2013] 55 taxmann.com 335 (Bangalore). As per the appellant in this referred case the Hon'ble ITAT Special Bench, Bangalore has held that when a company undertakes to issue shares to its employees at ....