ACIT 10(3)(1), MUMBAI V. NIKMO ENTERTAINMENT LTD, MUMBAI

ITA 4944/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9646 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2012-2013
• Appeal Filed On: 02-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Depreciation; Capital receipt; Unabsorbed depreciation
• Section: 142(1); 115JB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI BEFORE SHRI G.S. PANNU , AM AND SHRI AMARJIT SINGH, JM / I .T.A. NO. 4944 / MUM/ 20 1 6 ( / ASSESSMENT YEAR: 2012 - 13 ) ACIT 10(3)(1) R.NO. 212 AAYAKAR BHAVAN, M.K. RD MU MBAI PIN:400020 / VS. NIKMO ENTERTAINMENT LTD. NOW KNOWN AS PVR LTD. 10 TH FLOOR, 215 ATRIUM ANDHERI KURLA RD. MUMBAI PIN:400059 ./ ./ PAN/GIR NO. : AAACP 4526 D ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING : 07 .0 8 .2017 / DATE OF PRONOUNCEMENT : 22 . 09 . 2017 / O R D E R PER AMARJIT S INGH, J M: THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 16 .0 5 .201 6 , PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 21 MUMBAI [HEREINAFTER REFERRED TO AS THE CIT(A)] R ELEVANT TO THE AY.2012 - 13. 2 . THE REVENUE HAS RAISED THE FOLLOW ING GROUNDS: - WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN HOLDING ENTERTAINMENT DUTY COLLECTED BY THE ASSESSEE AS CAPITAL RECEIPT RELYING ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS . CHAPHALKAR BROTHERS WITHOUT APPRECIATING THE FACT THAT THE REVENUE BY: S HRI RAJESH KUMAR YADAV ( DR ) ASSESSEE BY : SHRI NONE ITA. NO. 4944/M/2016 A.Y. 2012 - 13 2 DEPARTMENT HAS NOT ACCEPTED THE SAID DECISION AND HAS FILED SLP WHICH IS PENDING BEFORE THE HONBLE SUPREME COURT. THE APPELLANTS PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUND BE SET ASI DE AND THAT OF THE AO BE RESTORE. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUNDS OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 3 . THE BRIEF FACTS OF THE CASE , ARE THAT THE ASSESSE E F ILED ITS RETURN OF INCOME ON 14 . 09 .20 12 DECLARING TOTAL INCOME T O THE TUNE OF NIL AFTER SET OFF OF B/F BUSINESS LOSS AND UNABSORBED DEPRECIATION OF RS.58,84,999/ - . THE ASSESSEE HAS PAID THE TAX ON BOOK PROFIT U/S 115JB OF RS.1,78,80,277. THE RETURN WAS PROCESSED U/S 143(1) OF THE ACT , 1961. THEREAFTER, THE CASE WAS SEL ECTED FOR SCRUTINY AND ACCORDINGLY NOTICE U/S 143(2) OF THE ACT DATED 08.08.2013 AND NOTICED U/S 142(1) OF THE ACT DATED 02.04.2014 AND 08.12.2014 WERE ISSUED AND SERVED UPON THE ASSESSEE. THE ASSESSEE WAS A COMPANY ENGAGED IN THE BUSINESS OF MULTIPLEX THE ATRES. ON VERIFICATION , IT WAS OBSERVED THAT THE ASSESSEE HAS CLAIMED THE INCENTIVE RECEIVED ON ACCOUNT OF ENTERTAINMENT TAX BENEFIT OF RS.1,53,43,776/ - TREATED AS CAPITAL RECEIPT. NOTICE WAS GIVEN AND AFTER CONSIDERING THE REPLY THE SAID RECEIPT WAS TREA TED AS REVENUE RECEIPT IN THE HANDS OF THE ASSESSEE AND THE INCOME OF THE ASSESSEE WAS ASSESSED TO THE TUNE OF RS.2,12,28,780/ - . FEELING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WHO ALLOWED THE CLAIM OF THE ASSESSEE . THEREFORE, TH E REVENU E HAS FILED THE PRESENT APPEAL BEFORE US 4. WE HAVE HEARD TH E ARGUMENT ADVANCED BY THE LD. R EPRESENTATIVE OF THE PARTIES AND PERUSED THE RECORD. THE CONTENTION OF THE REVENUE IS THAT THE CIT(A) HAS WRONGLY TREATED THE ENTERTAINMENT TAX COLLECTED BY THE ASSESSEE AS CAPITAL RECEIPT RELYING UPON THE DECISION IN THE CASE OF THE CHAPHALKAR ITA. NO. 4944/M/2016 A.Y. 2012 - 13 3 BROTHER (2013) 351 ITR 309 (BOM) WHEREAS THE APPEAL OF THE SAID CASE WAS PENDING BEFORE THE SUPREME COURT , THEREFORE, IN THE SAID CIRCUMSTANCES, THE ENTERTAINMENT DUTY COLL ECTED BY THE ASSESSEE IS LIABLE TO BE TREATED AS REVENUE RECEIPT AND ACCORDINGLY THE FINDING OF THE CIT(A) IS LIABLE TO BE SET ASIDE. HOWEV ER, ON THE OTHER HAND, THE LD. R EPRESENTATIVE OF THE ASSESSEE HAS REFUTED THE SAID CONTENTION. BEFORE GOING FURTHER , IT IS NECESSARY TO ADVERT THE FINDING OF THE CIT(A) ON RECORD .: - I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT CAREFULLY. THE HONBLE HIGH COURT IN THE ORDER DT. 08.06.2016 IN THE CASE OF CHAPHALKAR BROTHERS HAVE HELD THAT THE OBJECT OF GRANTING E NTERTAINMENT TAX SUBSIDY IS TO PROMOTE CONSTRUCTION OF MULTIPLEX ENTERTAINMENT TAXS SUBSIDE IS TO PROMOTE CONSTRUCTION OF THEATRE COMPLEXES AND THE RECEIPT OF SUBSIDY WOULD BE ON CAPITAL ACCOUNT. THE HONBLE ITAT IN THE APPELLANTS CASE FOR A.Y. 2008 - 09 HAS RELIED UPON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CHAPHALKAR BROTHERS 2013 351 ITR 309 (BOM) HELD THAT THE APPELLANTS CLAIM TO TREAT THE SAME AS ON CAPITAL ACCOUNT IS CORRECT. IN THESE FACTS AND THE BINDING DECISION OF THE JURISDICT IONAL HIGH COURT, THE APPELLANTS GROUND OF APPEAL IS ALLOWED AND THE ADDITION MADE BY THE AO IS DELETED. 5. ON APPRAISAL OF THE ABOVE MENTIONED ORDER , WE NOTICED THAT THE CIT(A) HAS PASSED THE ORDER ON THE BASIS OF THE FINDING GIVEN BY THE HONBLE HIGH CO URT IN THE CASE OF CIT VS. CHAPHALKAR BROTHER (2013) 351 ITR 309 (BOM) AND ITA. NO. 1036/M/2010 DATED 08.06.2011 ITAT MUMBAI BENCH IN THE APPELLANTS OWN CASE FOR THE A.Y. 2008 - 09 IN WHICH THE SAID RECEIPT HAS BEEN TREATED AS CAPITAL IN THE NATURE. THE SAID ORDER HAS PASSED THE ON THE BASIS OF ORDER PASSED BY THE HONBLE HIGH COURT IN THE CASE OF CHAPHALKAR BROTHER (2013) 351 ITR 309 (BOM) . THE FACTS ARE NOT DISPUTED . N O DISTINGUISHABLE LAW HAS BEEN PRODUCED BEFORE US . P ENDENCY OF THE APPEAL BEFORE THE HONB LE SUPREME COURT NOWHERE RESTRICTED THE CLAIM ITA. NO. 4944/M/2016 A.Y. 2012 - 13 4 OF THE ASSESSEE. THEREFORE IN VIEW OF THE SAID CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE CIT(A) HAS PASSED THE ORDER JUDICIOUSLY AND CORRECTLY WHICH IS NOT LIABLE TO BE INTERFERED WITH AT THIS APPELLATE STAGE. ACCORDINGLY, THIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. 6 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS HERE BY ORDERED TO BE DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT ON 22 . 0 9 . 2017 . SD/ - SD/ - ( G. S. PANNU ) (AMARJIT SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; DATED : 22 .09 .2017 V.P. SINGH / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RE SPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI