Assistant Commissioner of Income -tax, V. M/s. Chaphalkar Brothers, Pune, Sangli

ITA 1895/PUN/2013

• Counselvise Citation: 189524514 RSA 2013
• Duration Of Justice: 11 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 21-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Assessee Lawyers: S V DESH
• Keywords: Difference of opinion; Capital receipt; Change of opinion

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.1895/PN/2013 (A.Y:2010-11) ACIT, CIRCLE-2, SANGLI APPELLANT VS. M/S. CHAPHALKAR BROTHERS, PUNE C/O PRATAP TALKIES, 33, MAHAVEER NAGAR, SANGLI. PAN: AABFC8307R RESPONDENT APPELLANT BY : SHRI B.C. MALAKAR RESPONDENT BY : SHRI S.V. DESHPANDE DATE OF HEARING : 23.09.2014 DATE OF PRONOUNCEMENT : 24.09.2014 ORDER PER SHAILENDRA KUMAR YADAV : THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST O RDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), KOLHAPUR DATE D 24.07.2013 FOR A.Y. 2010-11 ON THE FOLLOWING GROUNDS. 1. ON THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE AN D THE POSITION OF LAW, THE ORDER OF THE LD.CIT[A] DATED 1 9.08.2013 IS AT VARIANCE WITH HIS EARLIER ORDER DATED 24.07.2 013 IN THE APPELLANT'S OWN CASE FOR THE SAME ASSTT. YEAR. THE REFORE, THE LD. CIT[A]'S ORDER DATED 19.08.2013 TANTAMOUNT TO A CHANGE OF OPINION LEADING TO A RECALLING OF THE EAR LIER APPELLATE ORDER, WHICH IS NOT PERMITTED IN LAW. 2. THE LD.CIT [A] ERRED IN HOLDING THAT THE SUBSIDY IN QUESTION RECEIVED IS A CAPITAL RECEIPT. 3. THE LD. CIT[A] ERRED IN NOT APPRECIATING THE FACT T HAT THE CONCESSIONS IN DUTY GRANTED BY THE MAHARASHTRA GOVT . IS NOT FOR ACQUIRING NEW ASSETS BUT IT IS A SORT OF CA SH ASSISTANCE GIVEN FOR THE PURPOSE OF CARRYING ON THE BUSINESS. ITA NO.1895/PN/13 M/S. CHAPHALKAR BROTHERS, PUNE 4. THE LD.CIT[A] HAS ALSO FAILED TO APPRECIATE THAT TH E INCENTIVE GRANTED IS AFTER COMMENCEMENT OF ITS BUSI NESS. 5. THE LD.CIT[A] ERRED IN HOLDING THAT THE SAID CASH ASSISTANCE GRANTED HAS NO LINKS EITHER TO THE CAPIT AL OUTLAY OR THE AMOUNT OF CAPITAL INVESTMENT OF THE ASSESSEE FIRM. 6. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, SU BSTITUTE, OR DELETE ANY OF THE GROUNDS URGED HEREIN ABOVE AS AND WHEN FOUND NECESSARY. 2. THE ASSESSEE FIRM IS IN THE BUSINESS OF FILM EX HIBITION AND DISTRIBUTION AND BUSINESS OF RUNNING HOTEL. BUSIN ESS OF FILM EXHIBITION IS DONE IN THE NAME AND STYLE OF CITY PR IDE AND HOTEL BUSINESS IS RUN IN THE NAME AND STYLE OF HOTEL UTSA V AND ATHITHI RESTAURANT. AS PER TAX AUDIT REPORT IN FORM NO.3C D FILED ALONG WITH THE RETURN, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE FIRM CLAIMED AN AMOUNT OF RS.2,66,33,370/- AS CAPIT AL RECEIPT ON ACCOUNT OF SUBSIDY OF ENTERTAINMENT TAX AND THE A MOUNT WAS NOT OFFERED FOR TAXATION. ON BEING SHOW CAUSED, IT WAS REPLIED THAT THE, SAID INCENTIVE WAS GRANTED TO ENCOURAGE CONSTRUCTIO N OF MULTIPLEXES TO PRESERVE MARATHI CINEMA AND TO ENSUR E A SPECIFIC AND UNINTERRUPTED BENEFIT OF SEVERAL ENTERTAINMENT FACILITIES UNDER ONE ROOF TO THE GENERAL PUBLIC FOR A CONTINUOUS PER IOD OF TEN YEARS. AS PER THE ASSESSEE, THE ISSUE STANDS RESOLVED IN F AVOUR OF THE ASSESSEE BY THE ORDER OF THE HONBLE HIGH COURT OF BOMBAY VIDE THEIR ORDER DATED 08.06.2011, WHEREIN THE INCENTIVE RECEIVED BY THE ASSESSEE WAS HELD AS CAPITAL RECEIPT. 2.1 THE ASSESSING OFFICER HAS FOLLOWED ASSESSMENT O RDER FOR THE ASSESSMENT YEAR 2003-04 WHEREIN THE SAME ISSUE HAD ARISEN. RELYING ON THE DECISION OF THE ITAT, INDORE BENCH I N THE CASE OF ITO V/S SHREEJEE CHITRAMANDIR 97 ITD 66, THE AMOUNT CLA IMED BY THE ASSESSEE HAS BEEN TREATED AS REVENUE RECEIPT AND AD DED TO THE INCOME. ACCORDING TO THE ASSESSING OFFICER, IN THE ASSESSMENT YEAR 2003-04, THE ASSESSEE HAS GOT RELIEF FROM ITAT, PUN E AND HONOURABLE HIGH COURT, BOMBAY, HOWEVER, THE DEPARTM ENT HAS ITA NO.1895/PN/13 M/S. CHAPHALKAR BROTHERS, PUNE FILED SLP BEFORE THE HONOURABLE SUPREME COURT. THE SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF THE REVENUE, IN TER ALIA, REQUESTED TO SET ASIDE THE ORDER OF CIT(A) AND THAT OF ASSESSING OFFICER BE RESTORED. ON THE OTHER HAND, THE LEARNE D AUTHORIZED REPRESENTATIVE HAS SUPPORTED THE ORDER OF CIT(A) ON THE ISSUE. 2.2 AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND M ATERIAL ON RECORD, WE FIND THAT THIS ISSUE WAS DECIDED AGAINST THE ASSESSEE, WHEREIN THE ADDITION IN QUESTION WAS CONFIRMED. HO WEVER, SUBSEQUENTLY, THE CIT(A) PASSED A CORRIGENDUM IN TH E LIGHT OF SUBSEQUENT DEVELOPMENT WHICH READS AS UNDER: CORRIGENDUM THIS IS IN CONTINUANCE WITH THE APPELLATE ORDER IN THE CASE OF SHRI M/S. CHAPHALKAR BROTHERS, 33, C/O PRAT AP TALKIES, SANGLI DATED 24/07/2013 FOR ASSESSMENT YEA R 2010- 11. 2. IN THIS APPEAL, ONE OF THE POINTS OF ADDITION WA S ON ACCOUNT OF SUBSIDY ON ENTERTAINMENT TAX. APPELLANT S GROUND ON THIS ISSUE WAS REJECTED ON THE REASONING THAT TH E SUBSIDY IN THE CASE IS NOT RELATED TO CREATION OF ANY ASSET SINCE IT WAS FOR ENHANCING THE REVENUE OF MULTIPLEXES IN THEIR S TATE. THERE ARE OTHER FEATURES OF SCHEME DISCUSSED IN THE ORDER WHICH IN THE OPINION OF THE UNDERSIGNED DID NOT ENTITLE THE APPELLANT TO CLAIM THE SUBSIDY AS CAPITAL SUBSIDY. 3. IT HAS HOWEVER BEEN NOTICED THAT IN THE APPELLAN T'S OWN CASE IN EARLIER YEARS, THE HONOURABLE ITAT 'A' BENC H, PUNE HAS DECIDED THIS VERY ISSUE IN APPELLANT'S FAVOUR. THE DECISION OF THE ITAT HAS BEEN CONFIRMED BY HONOURABLE BOMBAY HIGH COURT IN APPEALS NO. 1036/2010 AND 1147/2010. FURTH ER IN ASSESSMENT YEAR 2009-10 THIS ISSUE HAS BEEN DECIDED IN APPELLANT'S FAVOUR BY MY PREDECESSOR IN OFFICE FOLL OWING THE ABOVE MENTIONED ORDER OF THE ITAT AND THE BOMBAY HI GH COURT. IT WAS HELD BY THE HONOURABLE HIGH COURT THA T IN THE LIGHT OF THE AFORESAID OBJECTS OF THE SCHEME FRAMED BY THE STATE GOVERNMENT, THE DECISION OF THE INCOME -TAX APPELLATE TRIBUNAL THAT THE AMOUNT OF THE SUBSIDY RECEIVED BY THE ASSESSEE IS ON CAPITAL ACCOUNT CANN OT BE FAULTED. ITA NO.1895/PN/13 M/S. CHAPHALKAR BROTHERS, PUNE 4. RESPECTFULLY FOLLOWING THESE ORDERS OF THE SUPER IOR APPELLATE AUTHORITIES, INSPITE OF MY VIEWS AS DISCUSSED IN TH E ORDER, I HAVE TO GO ALONG WITH THESE DECISIONS AND DECIDE TH E ISSUE IN FAVOUR OF THE APPELLANT. THE ORDER DATED 24/07/2013 STANDS CORRECTED ON THIS ISSUE. 2.3 THUS, THIS ISSUE HAS RIGHTLY BEEN DECIDED BY TH E CIT(A) IN FAVOUR OF THE ASSESSEE FOLLOWING THE DECISION OF TH E HONBLE BOMBAY HIGH COURT IN THE ASSESSEES OWN CASE FOR A.Y. 2008 -09. ACCORDINGLY, WE ARE NOT INCLINED TO INTERFERE WITH THE FINDING OF CIT(A) WHO HAS RIGHTLY HELD ISSUE IN ASSESSEES FAV OUR BY HOLDING THAT THE AMOUNT OF SUBSIDY RECEIVED BY THE ASSESSEE IS A CAPITAL RECEIPT. WE UPHOLD THE SAME. 3. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 24 TH DAY OF SEPTEMBER, 2014. SD/- SD/- (R.K. PANDA) (SHAILENDRA KUMAR YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED THE 24 TH SEPTEMBER, 2014 GCVSR COPY TO:- 1) THE DEPARTMENT 2) ASSESSEE 3) THE CIT(A), KOLHAPUR 4) THE CIT, KOLHAPUR 5) THE DR, A BENCH, I.T.A.T., PUNE. 6) GUARD FILE BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, PUNE.