Deputy Commssioner of Income-tax, V. M/s. Karandikar Enterprises, Pune

ITA 390/PUN/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7105 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 06-04-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIL CHAWARE
• Assessee Lawyers: S V DESH
• Keywords: Capital asset; Capital receipt
• Section: 143(3)

Judgement Text

] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , ! ' , $ % BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO.390/PUN/2015 ' ' / ASSESSMENT YEAR : 2011-12 DY.COMMISSIONER OF INCOME TAX, CIRCLE-2, PUNE, 1 ST FLOOR, B WING, PMT BUILDING, SHANKARSHETH ROAD, PUNE 37. . / APPELLANT V/S M/S. KARANDIKAR ENTERPRISES C/O. MANGALA MULTIPLEX, 111, SHIVAJINAGAR, PUNE 411 005. PAN :AADFK2227Q. . / RESPONDENT / APPELLANT BY : SHRI ANIL CHAWARE / RESPONDENT BY : SHRI S.V. DESHPANDE. ( / ORDER PER ANIL CHATURVEDI, AM : THIS APPEAL FILED BY THE REVENUE IS EMANATING OUT OF THE ORDER OF COMMISSIONER OF INCOME TAX (A) III, PUNE DT.31.12.2014 FOR THE ASSESSMENT YEAR 2011-12. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER :- / DATE OF HEARING : 02.02.2017 / DATE OF PRONOUNCEMENT: 17.02.2017 2 ITA NO.390/PUN/2015 AY.NO.2011-12 2.1 ASSESSEE IS A PARTNER-SHIP FIRM STATED TO BE ENGAGED IN THE BUSINESS OF FILM EXHIBITION AT MANGALA MULTIPLEX. ASSESSEE FILED ITS RETURN OF INCOME FOR A.Y. 2011-12 ON 15.08.2011 DECLARIN G TOTAL INCOME OF RS.36,02,443/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAMED U/S 143(3) VIDE ORDER DT.18.03.2014 AND THE TOTAL INCOME WAS DETER MINED AT RS.3,00,08,964/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD. CIT(A), WHO VIDE ORDER DT.31.12.2014 IN APPEAL NO.(PN/CIT(A)-3/DCIT CIR.3/4/2014-15/127) GRANTED PARTIAL RELIEF TO ASSESSEE. AGGRIEVED BY THE ORDER OF LD. C IT(A), REVENUE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLO WING GROUNDS : 1. THE LD.CIT(A) ERRED IN HOLDING THAT THE INCENTIVE RECEIVED BY THE ASSESSEE IN ENTERTAINMENT TAX LIABILITY WAS A CAPITAL RECEIPT AND THEREFORE, NOT EXIGIBLE TO TAX. 2. THE LD.CIT(A) FAILED TO APPRECIATE THAT THOUGH THE BOMBAY ENTERTAINMENT DUTY(AMENDMENT )ACT 2001 ENVISAGED GRANTING OF INCENTIVE TO NEWLY CONSTRUCTED MULTIPLEX THEATRE AND THOSE SINGLE SCREEN THEATRES LATER CONVERTED INTO MULTIPLEX THEATRE, THE SAME WAS RECEIVED BY THE ASSESSEE AFTER COMMENCEMENT OF THE BUSINESS OF MULTIPLEX BY THE ASESSEE. 3. THE LD.CIT(A) FAILED TO APPRECIATE THAT SCHEME OF INCENT I VE IN ENTERTAINMENT TAX UNDER THE BOMBAY ENTERTAINMENT DUTY (AMENDMENT) ACT 2001 DOES NOT CONTAIN ANY SPECIFIC DIRECTION ON HOW THE PROCEEDS ARE TO BE UTILIZED AND THEREFORE, SUCH INCENTIVE CANNOT BE REGARDED AS AN AID TO THE CONSTRUCTION OF THE MULTIPLEX OR TOWARDS ANY CAPITAL OUTLAY. 4. THE LD.CIT(A) FAILED TO APPRECIATE THAT THE RECEIPT OF TAX INCENTIVE IS NOT A RECEIPT IN LIEU O F A SOURCE OF INCOME NOR THAT ANY OF THE ASSESSEE'S SOURCE OF INCOME HAS NOT BEEN EXTINGUISHED/TRANSFERRED. 3 ITA NO.390/PUN/2015 AY.NO.2011-12 5. THE LD.CIT(A) FAILED TO APPRECIATE THAT THE RECEIPT WAS IN LIEU OF INCOME AND IT WAS GENERATED BECAUSE OF A PART OF THE ASSESSEE'S INCOME HAS NOT BEEN SUBJECTED TO ENTERTAINMENT TAX AND THEREFORE, SUCH CONCESSION BEAR THE CHARACTER OF INCOME ON REVENUE ACCOUNT. 6. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR OMIT ANY OF THE ABOVE GROUNDS OF APPEAL DURING THE COURSE OF THE APPELLATE PROCEEDINGS. 3. BEFORE US, AT THE OUTSET, LD.D.R. SUBMITTED THAT THOUGH REVENUE HAS RAISED VARIOUS GROUNDS BUT THE SOLITARY ISSU E FOR ADJUDICATION IS WITH RESPECT TO TREATMENT OF SUBSIDY RECE IVED BY THE ASSESSEE I.E., WHETHER IT IS REVENUE RECEIPT OR CAPITAL RECEIPT. 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, AO NOTIC ED THAT ASSESSEE HAD RECEIVED ENTERTAINMENT TAX INCENT IVE OF RS.2,32,81,521/- AND IT WAS TREATED AS CAPITAL RECEIPT BY ASSESSEE AND THEREFORE NOT OFFERED TO TAX BY RELYING O N THE DECISION OF BOMBAY HIGH COURT IN THE CASE OF CIT, KOLHAPUR VS. M/S. CHAPHALKAR BROTHERS, PUNE IN ITA NOS.1036 AND 1147/2010. THE SUBMISSION OF THE ASSESSEE THAT THE REC EIPTS ARE OF CAPITAL IN NATURE WAS NOT FOUND ACCEPTABLE TO THE AO. AO WAS OF THE VIEW THAT THE RECEIPT OF TAX INCENTIVE WAS NOT A RECEIPT IN LIEU OF SOURCE OF INCOME. HE WAS FURTHER OF THE VIEW TH AT THE INCENTIVE WAS RECEIVED AFTER THE COMMENCEMENT OF BUSINESS AND IT WAS NOT RELATED TO ANY CAPITAL RECEIPT OR CAPITAL OUTLAY AND FURTHER IT WAS NOT REQUIRED TO BE SPENT TOWARDS ANY SP ECIFIC PURPOSE. HE THEREFORE HELD THAT THE SUBSIDY RECEIVED B Y THE ASSESSEE TO BE REVENUE RECEIPT AND ACCORDINGLY, ADDED IT TO THE INCOME OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF AO, A SSESSEE 4 ITA NO.390/PUN/2015 AY.NO.2011-12 CARRIED THE MATTER BEFORE LD. CIT(A), WHO DELETED THE AD DITION MADE BY AO BY HOLDING AS UNDER : 3.4 I HAVE CONSIDERED THE SUBMISSION MADE BY THE APP E LLANT AND P E RU SED M AT E RI A L AS RECORD. THE ON L Y ISSUE INVOLVED IN THE GROUNDS OF APP EA L RA ISE D B Y THE APPE L LANT RELATES TO THE NATURE OF INCENTIVE RECEIVED BY THE APPELL ANT IN T H E F O R M OF ENT ER TAINMENT TAX SUB SI D Y I.E., THE SAME TO BE ON CAPITAL AC C OUN T OR R EVENUE ACCOU N T . T H E AO H AS TREAT ED THE I NCENTIVE RECEIVED BY THE APPELLAN T TO BE O N ACCOUNT OF REVENUE H E N CE . T AXA B LE. T H E B O MBAY ENTERTAINMENT DUTY A C T (AMENDMENT ACT 2001) GRANTS INCENTIVE TO THE NEWLY CONSTRUCTED MULTIPLEX THEATRE AND ALSO TO THE ORIGINAL SINGLE SCREEN BUT LATER ON CONVERTED INTO MULTIPLEX THEATRE SUBJECT TO FULFILL MENT OF CERTAIN CONDITIONS AS ENUMERATED IN THE STATEMENT OF OBJECT AND REASONS. THE APPELLANT HAS BROUGHT OUT T HE FACT RELATING TO THE BOMBAY ENTERTAINMENT DUTY ACT (AMENDMENT 2001) WHICH WAS BROUGHT INTO FORCE ON 17.08 . 2001 WHEREBY , THE INCENTIVE WAS GRANTED IN THE FORM OF ENTERTAINMENT DUTY. CLAUSE (A) OF SECTION 1 3 OF THE AFORESAID ACT, PROVIDES THE ELIGIBILITY FOR THE INC ENTIVE IN RESPECT OF NEWLY CONSTRUCTED MULTIPLEX WHEREAS CLAU SE (D) OF SECTION 13 PRESCRIBES THE ELIGIBILITY OF THE SAI D INCENTIVE EVEN IN CASE OF EXISTING CINEMAS SUBJECT TO ITS CON VERSION INTO A MULTIPLEX. THE APPELLANT FIRM IN THE PRESENT CASE FILED APPLICATION FOR THE PURPOSE OF OBTAINING THE 'LETTER OF INTENT' WHICH WAS ISSUED BY THE REVENUE AND FOREST DEPARTMENT VIDE ORDER DATED 25.06.2004. THE APPELLA NT THEREAFTER, CONVERTED THE SINGLE SCREEN MANGALA CIN EMA BETWEEN 19.02.2002 AND COMPLETED ON 21.02.2007. THEREAFTER THE APPELLANT AFTER OBTAINING THE 'ELIGI BILITY CERTIFICATE' WITH EFFECT FROM 16.10.2009 BECAME ENT ITLED TO FULLY ENJOY THE INCENTIVE SCHEME AND DURING THE A . Y . 2010-11 RECEIVED THE ENTERTAINMENT DUTY INCENTIVE F OR THE FIRST TIME OF RS.1,60,05 , 440/-. THUS THE INCENTIVE GRANTED TO THE APPELLANT AS PER THE FACTS AND PROVISIONS OF ENTERTAINMENT DUTY ACT IS FOR THE FOLLOWING SPECIFI C OBJECT AND PURPOSES: 1. TO ENCOURAGE CONSTRUCTION OF NEW THEATRES (MULTIPLEX) TO ENSURE HEALTHY CULTURAL DEVELOPMENT . 2. TO PRESERVE AND PROMOTE MARATHI CINEMA. 3. TO ENSURE SOCIAL CONSIDERATION BY BUYING VARIOUS ENTERTAINMENT FACILITIES UNDER ONE ROOF WITH A VIEW TO PROVIDING A COMPLETE FAMILY ENTERTAINMENT CENTRE . THE ISSUE AS TO WHETHER THE SAID RECEIPT IS ON ACCO UNT OF REVENUE OR CAPITAL CAME UP BEFORE THE ITAT, PUNE IN THE CASE OF CHAPHALKAR BROTHERS (CITED SUPRA) WHEREIN T HE DEPARTMENT HAD TAKEN THE FOLLOWING GROUND AT ALL TH E STAGES TO TREAT THE INCENTIVE OF REVENUE NATURE . 5 ITA NO.390/PUN/2015 AY.NO.2011-12 I) THE SUBSIDY IS RECEIVABLE ONLY AFTER COMMENCEMENT OF BUSINESS. II) THE SUBSIDY IS NOT RELATED TO ANY CAPITAL ASSET OR CAPITAL OUTLAY. III) THE INTENTION BEHIND THE GRANT OF THE SUBSIDY IS TO SUPPORT THE INDUSTRY AS THE MULTIPLEX COMPLEXES ARE HIGHLY CAPITAL INTENSIVE AND THEIR GESTATION PERIOD IS LONGER . IV) THE SUBSIDY IS NOT REQUIRED TO BE SPENT TOWARDS ANY SPECIFIC PURPOSE. AFTER DEALING WITH THE AFORESAID ISSUES THE HON ' BLE ITAT, PUNE HAVE HELD THAT THE ENTERTAINMENT DUTY INCENTIV E IS CLEARLY OF A CAPITAL NATURE. THE TRIBUNAL HELD AS U NDER: '10 . IN THE LIGHT OF THE ABOVE DISCUSSION WE CAN THEREFORE SUMMARIZE OUR CONCLUSION THAT BROADLY SPEAKING THE SUBSIDY CAN BE OF TWO TYPES: (I) FOR THE PURPOSE OF HELPING THE GROWTH OF AN INDUSTRY . (II) FOR THE PURPOSE OF SUPPLEMENTING THE PROFITS O F AN INDUSTRY . 10.1 TO ASCERTAIN WHETHER IN A PARTICULAR CASE THE SUBSIDY IN QUESTION FALL UNDER THE CATEGORY (I) OR (II); ONE HAS TO CAREFULLY EXAMINE THE FORM AS WELL AS SUBSTANCE OF THE IMPUGNED SCHEME. WE HAVE DONE THAT EXERCISE AND ON CLOSE EXAMINATION UNDISPUTEDLY IT WAS NOTICED THAT THE SCHEME IN QUESTION HAD FALLEN IN THE FIRST CATEGORY I. E. FOR THE PURPOSE OF HELPING THE GROWTH OF AN INDUSTRY. THOUGH THE COLLECTION WAS IN THE FORM OF AN ENTERTAINMENT DUTY VIA SALE OF TICKETS FOR A LIMITED PERIOD BUT ITS UTILIZATION WAS PREDETERMINED AND GRANTED WITH AN ASSURANCE TO COVER UP THE COST OF CONSTRUCTION. ONCE IT IS DEMONSTRATED BEFORE US THAT TOO UNDISPUTEDLY THAT IT WAS NOT ATTRIBUTED IN ANY MANNER TOWARDS SUPPLEMENTING OF DAY-TO-DAY EXPENDITURE OR IN THE FURTHERANCE OF THE PROFITS THEN IT CANNOT BE SAID TO BE IN THE CHARACTER OF A REVENUE RECEIPT . CONTRARY TO THIS IT WAS IN THE NATURE OF A CAPITAL RECEIPT BEING AN INCENTIVE TO SUPPLEMENT TH E CONSTRUCTION EXPENDITURE OF NEW SET UP OF MULTIPLEXES HENCE IN THE NATURE OF CAPITAL RECEIPT. TO ARRIVE AT THIS CONCLUSION WE DRAW SUPPORT FROM A PLETHORA OF DECISIONS, FEW OF THEM ALREADY CITED ABOVE. WITH THE RESULT WE DECIDE THE GROUND IN FAVOUR OF THE ASSESSEE.' 6 ITA NO.390/PUN/2015 AY.NO.2011-12 THE HON'BLE BOMBAY HIGH COURT FURTHER CONFIRMED TH E APPELLATE ORDER PASSED BY THE ITAT, PUNE HOLDING AS UNDER: 'SINCE THE OBJECT OF SUBSIDY WAS TO PROMOTE CONSTRUCTION OF MULTIPLEX THEATER COMPLEXES, IN OUR OPINION, RECEIPT OF SUBSIDY WOULD BE ON CAPITAL ACCOUNT. 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 THEATERS, THEN IRRESPECTIVE OF THE FACT THAT THE MULTIPLEXES HAVE BEEN CONSTRUCTED OUT OF OWN FUND OR BORROWED FUNDS, THE RECEIPT OF SUBSIDY WOULD BE ON CAPITAL ACCOUNT. 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 SUBSIDY RECEIVED BY THE ASSESSEE IS ON CAPITAL ACCOUNT CANNOT BE FAULTED . ' 3.5 THE ASSESSING OFFICER ON THE OTHER HAND HAS GONE ON THE ASSUMPTION THAT THE IMPUGNED AMOUNT TO BE A CONTINGENT LIABILITY AND HAS DISCUSSED SEVERAL CASE LAWS, HOWEVER, THE SAME DO NOT APPEAR TO HAVE ANY RELEVANCE TO THE BASIC ISSUE INVOLVED. THE APPELLANT HAS ALSO DISTINGUISHED THE CASE LAWS RELIED UPON BY THE AO IN ITS SUBMISSION FILED DURIN G THE APPELLATE PROCEEDINGS. THE AO HAS THUS FAILED TO BRING ON RECORD ANY SUCH MATERIAL SO AS TO CONSIDER THE AFORESAID RECEIPT TO BE ON ACCOUNT OF REVENUE AND HENCE TO BE TAXABLE. THE OBSERVATION OF THE PUNE, ITAT AND THE HON'BLE BOMBAY HIGH COURT CLEARLY HELD THE RECEIPT TO BE CAPITAL RECEIP T . IT IS ALSO NOTICED THAT THE GUJARAT HIGH COURT HAVE FOLLOWED THE DECISION OF THE BOMBAY HIGH COURT IN THE CASE OF DCIT VS INOX LEISURE LTD, 85 DTR 103. THE DEPARTMENT HAS, HOWEVER, FILED SLP, IN THE CASE OF CHAPHALKAR BROTHERS, PUNE THE DECISION OF WHICH IS PENDING BEFORE THE SUPREME COURT AND TILL THE DISPOSAL OF THE APPEAL BY THE SUPREME COURT THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IS FINAL AND BINDING BY VIRTUE OF THE WELL SETTLED PRINCIPLE OF BINDING PRECEDENT . 3.6 IN VIEW OF THE FOREGOING DISCUSSION ON THE SUBJECT THE RECEIPT OF RS .2,32,81,521/- ON AMOUNT OF ENTERTAINMENT TAX SUBSIDY IS HELD TO BE A CAPITAL RECEIPT AND, THEREFORE, THE ADDITION MADE BY THE AO IS LIABLE TO BE DELETED 7 ITA NO.390/PUN/2015 AY.NO.2011-12 AGGRIEVED BY THE ORDER OF LD. CIT(A). REVENUE IS NOW IN AP PEAL BEFORE US. 5. BEFORE US, AT THE OUTSET, LD. A.R. SUBMITTED THAT ON IDENTICAL FACTS IN THE CASE OF ITS SISTER CONCERN NAMELY, CHAPHALKAR BROTHERS, THE ISSUE WAS DECIDED BY THE CO-OR DINATE BENCH OF THE TRIBUNAL IN ASSESSEES FAVOUR. AGAINST THE O RDER OF TRIBUNAL, THE MATTER WAS CARRIED BY REVENUE TO HONBLE HIGH COURT. THE HONBLE BOMBAY HIGH COURT VIDE ITS ORDER IN ITA NO.1036 OF 2010 AND ITA NO.1147 OF 2010 DT.08.06.2011 DISMISSED THE APPEAL OF THE REVENUE. HE POINTED TO THE R ELEVANT ORDERS OF TRIBUNAL AND HIGH COURT OF BOMBAY WHICH ARE PLAC ED AT PAGE 1 TO 27 OF THE PAPER BOOK. HE THEREFORE SUBM ITTED THAT SINCE THE FACTS OF THE CASE OF THE ASSESSEE ARE IDENTICA L TO THE FACTS OF THE CASE OF M/S CHAPHALKAR BROTHERS (SUPRA), TH E ORDER OF LD. CIT(A) NEEDS TO BE UPHELD. LD.D.R. ON THE OTHER HA ND DID NOT CONTROVERT THE FACTUAL SUBMISSIONS MADE BY THE ASSE SSEE BUT HOWEVER SUPPORTED THE ORDER OF AO. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS AB OUT THE TREATMENT OF SUBSIDY RECEIVED BY THE ASSESSEE I.E., WHETHE R IT IS A CAPITAL RECEIPT OR A REVENUE RECEIPT. BEFORE US, ASSESSEE HAS SUBMITTED THAT ON IDENTICAL FACTS IN THE CASE OF ITS SISTER CONCERN I.E., M/S. CHAPHALKAR BROTHERS, IDENTICAL ISSUE AROSE AND WA S DECIDED IN ASSESSEES FAVOUR BY THE TRIBUNAL AND THE ORD ER OF TRIBUNAL WAS UPHELD BY THE HONBLE HIGH COURT OF BOMBAY. THE 8 ITA NO.390/PUN/2015 AY.NO.2011-12 AFORESAID SUBMISSIONS HAVE NOT BEEN CONTROVERTED BY REV ENUE. WE FIND THAT THE ISSUE BEFORE HONBLE BOMBAY HIGH COURT IN THE CASE OF CHAPHALKAR BROTHERS (SUPRA) (IN ITA NO.1036 OF 201 0 AND ITA NO.1147 OF 2010 ORDER DT.08.06.2011) WAS : WHETHER THE ENTERTAINMENT DUTY SUBSIDY GIVN TO ASSESSEE BY THE STATE GOVERNMENT FOR CONSTRUCTION O F MULTIPLEXES IS IN THE NATURE OF REVENUE RECEIPTS OR CAPITAL RECEIPTS IS THE QUESTION RAISED IN THE APPE AL. THEREAFTER THE HONBLE HIGH COURT AFTER CONSIDERING THE D ECISION OF HONBLE APEX COURT IN THE CASE OF CIT VS. PONNI SUGARS AND CHEMICALS LTD. REPORTED IN (2008) 306 ITR 392 (SC), OBSERVE D AS UNDER :- 4. IN THE PRESENT CASE, AS NOTED BY THE INCOME TAX APPELLATE TRIBUNAL, THE OBJECT OF GRANTING ENTERTAI NMENT DUTY SUBSIDY BY THE STATE GOVERNMENT AS FOLLOWS : ' 1 . A S A R E SUL T OF TH E ONSLAUGHT O F CA BL E T E L E V I S I ON A N D A D VE RTI S E M E N T I N TH E FI E LD OF IN F ORM A T IO N T E C HN O LO GY, TH E AVE RA G E OCCU P A N C Y I N C IN E M A THE AT R E H A S F A LL E N C O N S ID E R AB L Y A ND H A RDL Y A N Y N E W TH EA TR ES H AV E B E E N S T A R T E D IN T H E R E C E N T P AS T . P UB L I C A T L A R GE TH E S E DA YS PR E F E R TO S E E MO V I ES A T HOM E . K EE P IN G IN V I E W T H I S S C E N A RI O, A C O N CEPT OF C O M PL E T E F A MI L Y EN T ERT AI NM E N T C E NTR E , M O RE POPULARL Y KNOW N AS ' MU L TI P L EX THEATRE COMPLEX ' HAS EMERGED. TH E SE MULTIPLEX THEATR E COMPLEXES OFFER VARIOUS ENTERTAINMENT FACILITIES FO R THE ENTIRE FAMILY UNDER SINGLE ROOF . HOWEVER , THESE COMPLEXES A RE HIGHL Y CAPITAL INTENSIVE , THEIR GESTATION PERIOD IS ALSO QUITE LONGER, AND THEREFOR E, NEED GOVERNMENT SUPPORT AND INCENTIVE IN ENTERTAINMENT DUTY . 2. GOVE R NMENT HAS , THEREFORE, WITH A VIEW TO COMMEMORATE BIRTH CENTENARY OF CHITRAPATI LATE SHRI V SHANTARAM, DECIDED TO GRANT CONCESSION IN ENTERTAIN DUTY TO MULTIPLEX THEATRE COMPL EX ES TO PROM OT E C ONSTRUCTION O F N EW C IMENA HOUSES IN THE STAT E .' 9 ITA NO.390/PUN/2015 AY.NO.2011-12 5. SINCE THE OBJECT OF SUBSIDY WAS TO PROMOTE CONSTRUCTION OF MULTIPLEX THEATRE COMPLEXES, IN OUR OPINION, RECEIPT OF SUBSIDY WOULD BE ON CAPITAL ACC OUNT. THE FACT THAT THE SUBSIDY WAS NOT MEANT FOR REPAYIN G THE LOAN TAKEN FOR CONSTRUCTION OF MULTIPLEXES CANNOT B E A GROUND TO HOLD THAT SUBSIDY RECEIPT WAS ON REVENUE ACCOUNT, BECAUSE, IF THE OBJECT OF THE SCHEME WAS T O PROMOTE CINEMA HOUSES BY CONSTRUCTING MULTIPLEX THEATRES, THEN IRRESPECTIVE OF THE FACT THAT THE MU LTIPLEXES HAVE BEEN CONSTRUCTED OUT OF OWN FUNDS OR BORROWED FUNDS, THE RECEIPT OF SUBSIDY WOULD BE ON CAPITAL A CCOUNT. 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 SUBSIDY RECEI VED BY THE ASSESSEE IS ON CAPITAL ACCOUNT CANNOT BE FAULTE D. ACCORDINGLY, BOTH THE APPEALS ARE DISMISSED WITH NO ORDER AS TO COSTS. 7. BEFORE US, REVENUE HAS NOT POINTED OUT ANY DISTINGUISHABLE FEATURE IN THE FACTS OF THE PRESENT CASE AN D THAT OF CHAPHALKAR BROTHERS (SUPRA) NOR HAS PLACED ON RECORD ANY CONTRARY BINDING DECISION. IN VIEW OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A) AND THUS THE GROUNDS OF THE REVENUE ARE DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED ON 17 TH DAY OF FEBRUARY, 2017. SD/- SD/- ( SUSHMA CHOWLA ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER $ / ACCOUNTANT MEMBER PUNE; ! DATED : 17 TH FEBRUARY, 2017. YAMINI 10 ITA NO.390/PUN/2015 AY.NO.2011-12 ( ) *!+, -,! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3 . 4. 5. 6. COMMISSIONER OF INCOME TAX-(A)-III, PUNE. COMMISSIONER OF INCOME TAX-II, PUNE.. #$% &&'(, * '(, / DR, ITAT, A PUNE; %+, - / GUARD FILE. ( / BY ORDER, //// // TRUE COPY // T // // TRUE COPY // //TRUE COPY// . /012 / ASSISTANT REGISTRAR, * '( , / ITAT, PUNE.