TaxTMI 
TaxTMI 
2025 (9) TMI 1200
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....Income Tax Appellate Tribunal (ITAT) in appeal filed by the respondent being ITA No. 2143/De1/2011 which pertains to Assessment Year 2007-08. 2. Suffice to state that the grievance of the respondent has been noted by the Tribunal in paragraph 2 of its order, and in paragraph 3 onwards it has stated as under: "3. Ground Nos. 1 to 4 relates to the issue whether Entertainment tax collected and retained by assessee as incentive/ subsidy given by state Governments on account of development of new Multiplexes in the state is capital or revenue receipt." 3. The substantial questions of law proposed in this appeal by the Revenue appellant are the following: 2.1 Whether on the facts and in the circumstances of the case and in....
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....n favour of the respondent by the judgment of the Supreme Court in the case of Commissioner of Income Tax-1, Kolhapur vs. M/s Chaphalkar Brothers, Pune: 2017 INSC 1198 as followed by this Court in ITA nos. 113, 115, 116 and 117 of 2025 dated 29.04.2025, The Principal Commissioner of Income Tax Central-1 vs. PVR Ltd. NC: 2025:DHC:3026:DB, wherein paragraph 14, it has been held that the entertainment tax subsidy must be held to be capital in nature. The relevant paragraph 12 onwards in above four ITAs of the judgment of this Court reads as under : "12. The appeal preferred by the Revenue against the decision in CIT v. Chapalkar Brothers (supra) was dismissed by the Hon'ble Supreme Court in Commissioner of Income Tax-1, Kolha....
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....es in the State. The aforesaid object is clear and unequivocal. The object of the grant of the subsidy was in order that persons come forward to construct Multiplex Theatre Complexes, the idea being that exemption from entertainment duty for a period of three years and partial remission for a period of two years should go towards helping the industry to set up such highly capital intensive entertainment centers. This being the case, it is difficult to accept Mr. Narasimha's argument that it is only the immediate object and not the larger object which must be kept in mind in that the subsidy scheme kicks in only post construction, that is when cinema tickets are actually sold. We hasten to add that the object of the scheme is only one - ....
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....as advanced on question of law at 2.1 above. He contends that the issue is covered in terms of the judgment of this Court in ITA no. 564/2012 decided on 23.08.2022 in respect very same Assessee in PVR Ltd vs. Commissioner of Income Tax, wherein paragraph 5 the following has been held : "5. Consequently, following the judgment of the Karnataka High Court in CIT vs. Biocon Ltd. (Supra), the question of law is decided in favour of the assessee and it is held that the Income Tax Appellate Tribunal erred in law in holding that the difference between the price at which stock options were offered to employees of the appellant company under ESOP and ESPS and the prevailing market price of the stock on the date of grant of such options was ....