ACIT 16(1), MUMBAI V. INOX LEISURE LTD, MUMBAI

ITA 2482/MUM/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7949 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2012-2013
• Appeal Filed On: 06-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H N SINGH
• Assessee Lawyers: ROHAN DES
• Keywords: Capital asset; Depreciation; Cost of acquisition

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL C BENCH MUMB AI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH JUDICIAL MEMBER ITA NO. 2482/MUM/2017 (ASSESSMENT YEAR 2012-13 ) ACIT- 16(1) ROOM NO. 439, AAYAKAR BHAVAN, M.K. ROAD, CHURCHGATE, MUMBAI-400020. VS. M/S INOX LEISURE LTD. (ERSTWHILE M/S. FAME INDIA LTD.), 9 TH FLOOR, VIRAJ TOWERS, NEAR W.E. HIGHWAY, NEXT TO ANDHERI FLYOVER, MUMBAI-400093. PAN: AADCS7809P APPELLANT RESPONDE NT APPELLANT BY : SHRI H.N. SINGH (DR) RESPONDENT BY : SHRI ROHAN DESPANDE (AR) DATE OF HEARING : 19.09.2018 DATE OF PRONOUNCEMEN T : 19.09.2018 ORDERUNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. THIS APPEAL BY REVENUE UNDER SECTION 253 OF INCOME- TAX ACT IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-7, MUMBAI DATED 18. 01.2017 FOR ASSESSMENT YEAR 2012-13. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. WHETHER ON FACTS AND IN CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN DIRECTING TO DELETE THE ADDITIO N BEING RECEIPTS OF ENTERTAINMENT TAX SUBSIDY OF RS. 11,57,59,471/- AND TREATING IT AS CAPITAL IN NATURE, WITHOUT APPRECIATING THE FACT THAT THE SUBS IDY WAS NOT GIVEN BEFORE THE COMMENCEMENT OF OPERATIONS BUT FUR RUNNING THE BUSI NESS AND THUS QUALIFYING THIS AMOUNT AS REVENUE RECEIPTS. 2. WHETHER ON FACTS AND IN CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD. CIT(A) HAS ERRED IN DIRECTING TO DELETE THE DISALLO WANCE ON DEPRECIATION ON PLANT AND MACHINERY OF RS. 1,76,02,133/- PARTICULAR LY WHEN THE ENTERTAINMENT SUBSIDY WAS HELD TO BE CAPITAL IN NATURE AND AS SUC H THE COST OF ACQUISITION OF ITA NO. 2482/MUM/2017-M/S INOX LEISURE LTD. 2 CAPITAL ASSETS SHOULD BE REDUCED BY THE AMOUNT EQUI VALENT TO THE SUBSIDY RECEIVED. 3. THE APPELLANT PRAYS THAT THE ORDER OF CIT (A) ON THE ABOVE S BE SET ASIDE AND THAT OF ASSESSING OFFICER BE RESTORED. 2. AT THE OUTSET OF HEARING, THE LD. AUTHORIZED REPRES ENTATIVE (AR) OF THE ASSESSEE SUBMITS THAT BOTH THE GROUNDS OF APPEAL RA ISED BY REVENUE ARE COVERED IN FAVOUR OF ASSESSEE. THE LD. AR OF THE AS SESSEE FURTHER SUBMITS THAT THE LD. CIT(A) WHILE PASSING THE IMPUGNED ORDE R FOLLOWED THE DECISION OF TRIBUNAL IN ASSESSEES OWN CASE FOR ASS ESSMENT YEAR 2007-08 IN ITA NO. 6046/MUM/2010 DATED 21.08.2015. THE LD. AR OF THE ASSESSEE FURTHER SUBMITS THAT HONBLE SUPREME COURT IN CASE OF CIT V/S CHAPHALKAR BROTHERS PUNE [2018] 400 ITR 279 HELD TH AT THE OBJECT OF SUBSIDY SCHEME OF STATE GOVERNMENT IS TO ENCOURAGE DEVELOPMENT OF MULTIPLEX THEATRE COMPLEXES AND SUCH INCENTIVES IS CAPITAL IN NATURE. FOR GROUND NO. 2, THE LD. AR OF THE ASSESSEE SUBMITS TH AT GROUND NO.2 OF THE APPEAL IS ALSO COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR AY 2010- 11 AND 2011-12 IN ITA NO. 5212/MUM/2015 & 5213/MUM/2015 DATED 07.08.2 017. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE AF TER GOING THROUGH THE GROUNDS OF APPEAL AND THE COPY OF DECISIONS RELIED BY LD. AR OF THE ASSESSEE FAIRLY CONCEDED THAT BOTH THE GROUNDS OF A PPEAL RAISED BY REVENUE ARE COVERED IN FAVOUR OF ASSESSEE AND AGAIN ST THE REVENUE. ITA NO. 2482/MUM/2017-M/S INOX LEISURE LTD. 3 3. WE HAVE HEARD THE RIVAL CONTENTION OF BOTH THE PART IES AND PERUSED THE MATERIAL AVAILABLE ON RECORD AND DELIBERATED ON THE DECISIONS FURNISHED BY LD. AR. GROUND NO.1 RELATED TO DELETING THE ADDITIO N ON ACCOUNT OF RECEIPT OF ENTERTAINMENT SUBSIDY BY TREATING IT AS CAPITAL IN NATURE. WE HAVE NOTED THAT THE LD. CIT(A) WHILE GRANTING RELIEF TO THE AS SESSEE FOLLOWED THE DECISION OF TRIBUNAL IN ASSESSEES OWN CASE FOR ASS ESSMENT YEAR 2007-08 IN ITA NO. 6046/MUM/2010 DATED 21.08.2015. NO CONTR ARY DECISION IS BROUGHT TO OUR NOTICE BY REVENUE. FURTHER, WE HAVE NOTED THAT THIS ISSUE HAS BEEN SETTLED BY HONBLE APEX COURT IN CASE OF C IT V/S CHAPHALKAR BROTHERS PUNE (SUPRA), WHEREIN THE HONBLE APEX COU RT HELD THAT OBJECT OF THE SUBSIDY SCHEME OF STATE GOVERNMENT IS TO ENCOUR AGE DEVELOPMENT OF MULTIPLEX THEATRE COMPLEXES INCENTIVES WOULD BE CAP ITAL IN NATURE AND NOT REVENUE RECEIPT. THEREFORE, RESPECTFULLY FOLLOW ING THE DECISION OF HONBLE APEX COURT AND THE DECISION IN ASSESSEES O WN CASE FOR ASSESSMENT YEAR 2007-08, THE GROUND OF APPEAL RAISE D BY REVENUE IS DISMISSED. 4. GROUND NO.2 RELATES TO DELETING THE DISALLOWANCE ON DEPRECIATION ON PLANT AND MACHINERY. WE HAVE NOTED THAT LD. CIT(A) GRANTE D RELIEF TO THE ASSESSEE BY FOLLOWING THE DECISION OF TRIBUNAL IN A SSESSEES OWN CASE FOR ASSESSMENT YEAR 2007-08 IN ITA NO. 6046/MUM/2010 DA TED 21.08.2015, WHICH WAS FOLLOWED BY TRIBUNAL IN ASSESSEES OWN CA SE IN AY 2010-11 AND 2011-12 IN ITA NO. 5212/MUM/2015 5213 AND 5213 /MUM/2015 ITA NO. 2482/MUM/2017-M/S INOX LEISURE LTD. 4 DATED 07.08.2017. NO CONTRARY DECISION IS BROUGHT T O OUR NOTICE. THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF T RIBUNAL, WE DO NOT FIND ANY MERIT IN THE GROUNDS OF APPEAL RAISED BY REVENU E. 5. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 /09/2018. SD/- SD/- G.S. PANNU PAWAN SINGH ACCOUNTANT MEMBER J UDICIAL MEMBER MUMBAI, DATE: 19.09.2018 SK COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE 2. RESPONDENT 3. THE CONCERNED CIT(A) 4. THE CONCERNED CIT 5. DR C BENCH, ITAT, MUMBAI 6. GUARD FILE BY ORDER, DY./ASST. REGISTRAR ITAT, MUMBAI