DCIT 9(2)(2), MUMBAI V. CINEMAX PROPERTIES LTD, MUMBAI

ITA 5227/MUM/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0251 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 05-11-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAURABH DESPANDE
• Keywords: Depreciation; Capital receipt

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'C' BENCH, MUMBAI BEFORE SHRI P K BANSAL, VICE PRESIDENT AND SHRI PAWAN SINGH, JUDICIAL MEMBER ITA NO.5227 /MUM/2015 (ASSESSMENT YEAR: 2011-12) DY. CIT - 9(2)(2) VS. M/S. CINEMAX PROPERTIES LTD. ROOM NO. 665A, 6TH FLOOR AAYAKAR BHAVAN, M.K. ROAD MUMBAI 400020 10TH FLOOR, 251 ATRIUM CTS NO. 215, ANDHERI-KURLA ROAD ANDHERI (E), MUMBAI 400059 PAN AACCC1775F APPELLANT RESPONDENT APPELLANT BY: SHRI SAURABH DESPANDE RESPONDENT BY: NONE DATE OF HEARING: 07.08.2017 DATE OF PRONOUNCEMENT: 09.08.2017 O R D E R PER P.K. BANSAL, VICE PRESIDENT THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF THE CIT(A)-16, MUMBAI DATED 24.08.2015 FOR A.Y. 2011-12 . 2. NONE APPEARED ON BEHALF OF THE ASSESSEE EVEN THOUGH NOTICE WAS DULY SERVED. WE, THEREFORE, DECIDED TO DISPOSE OFF THIS APPEAL AFTER HEARING THE LEARNED D.R. 3. THE ONLY ISSUE INVOLVED IN THIS APPEAL RELATED TO THE DELETION OF THE ADDITION MADE BY THE AO ON ACCOUNT OF DISALLOWANCE OF ENTERTAINMENT TAX COLLECTED AND CLAIMED AS CAPITAL SUBSIDY AMOUNTING TO ` 6,45,79,148/-. 4. AFTER HEARING THE LEARNED D.R. AND GOING THROUGH T HE ORDERS OF THE TAX AUTHORITIES BELOW WE NOTED THAT SIMILAR ISSUE H AS ARISEN IN THE CASE OF THE ASSESSEE IN ASSESSMENT YEARS 2007-08, 2008-09, 2009-10 AND 2010- 11 AND THIS TRIBUNAL IN ITA NO. 394/MUM/2012 DATED 24.01.2014 FOR A.Y. 2008-09 WHILE DEALING WITH THE SAME ISSUE HELD AS U NDER: - 3. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLAT E AUTHORITY, AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE, C IT (A) PARTLY ALLOWED THE APPEAL OF THE ASSESSEE AND TREATED THE SAID AMOUNT OF ITA NO. 5227/MUM/2015 M/S. CINEMAX PROPERTIES LTD. 2 RS.6,98,17,074/- AS CAPITAL RECEIPT AND ACCORDINGLY DELETED THE ADDITION MADE BY THE AO BY RELYING ON THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF M/S. CHAPHALKAR BR OTHERS VS ITO VIDE ITA NOS.1342& 1443 OF 2006 AND DIRECTED THE AO TO ALLOW THE DEPRECIATION ON THE REDUCED COST OF ASSET. AGGRIEVE D WITH THE DECISION OF THE CIT (A) BOTH THE ASSESSEE AS WELL AS THE REV ENUE ARE IN APPEAL BEFORE THE TRIBUNAL. 6. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MAT ERIAL ON RECORD. FIRSTLY, ON THE ISSUE RAISED BY THE REVENUE CLAIMIN G THAT THE ENTERTAINMENT TAX/DUTY COLLECTED BY THE ASSESSEE IS TO BE TREATED AS A REVENUE RECEIPT, IT IS PERTINENT TO MENTION THAT TH E CASE OF THE ASSESSEE SQUARELY COVERED BY THE DECISION OF THE HO N'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. CHAPHALKAR BROTHE RS (SUPRA), DATED 08.06.2011, WHEREIN IT HAS BEEN HELD THAT THE SUBSI DY OF THIS KIND CONSTITUTES CAPITAL RECEIPTS AS IT IS MEANT FOR PRO MOTION OF THE NEW INDUSTRIES BY WAY OF MULTIPLEX THEATRES, IN OUR 3 V IEW, HAS BEEN RIGHTLY FOLLOWED BY THE LD.CIT(A) FOR TREATING THE IMPUGNED AMOUNT AS CAPITAL RECEIPTS . IT IS ALSO RELEVANT TO MENTION THAT THE FACT OF T HE ASSESSEE S CASE IS ALSO COVERED BY THE DECISION OF THE TRIBU NAL IN THE ASSESSEE S SISTER CONCERN CASE NAMELY VISTA ENTERTAINMENT PV T. LTD. IN ITA NO. 8402/MUM/2011 FOR THE ASSESSMENT YEAR 20 08-09, THE ORDER TO WHICH THE PRESENT AM IS ALSO A PARTY, WHER EIN IT HAS BEEN HELD THAT SIMILAR ADDITIONS ARE NOT SUSTAINABLE SIN CE THE SAME AMOUNTS TO CAPITAL IN NATURE. FOLLOWING THE ABOVE D ECISIONS IN THE SIMILAR CONTEXT OF FACTS INVOLVED, WE DO NOT FIND A NY JUSTIFIABLE REASON TO INTERFERE WITH THE DECISION OF THE LD. CIT(A) IN TREATING THE IMPUGNED AMOUNT AS CAPITAL RECEIPT AND THE SAME NOT LIABLE T O TAX. ACCORDINGLY, THE DECISION OF THE LD. CIT(A) ON THIS COUNT IS UPH ELD. SIMILAR DECISION ON THIS ISSUE WAS TAKEN BY THE TRIBUNAL IN THE ASSE SSEE S OWN CASE VIDE ITA NO.1287/M/2012 AND 1483/M/2012 FOR THE AY 2009-2010. THE HON'BLE TRIBUNAL HAS FOLLOWED ITS OWN JUDGEMENT IN ITA NO. 5692/ MUM/2013 FOR A.Y. 2010-11 AND ITA NO. 1287/MUM/2012 FOR A.Y. 2009-10 5. SINCE THE FACTS INVOLVED IN THE IMPUGNED ASSESSMEN T YEAR ARE ALSO SAME WE, THEREFORE, DO NOT FIND ANY ILLEGALITY OR I NFIRMITY IN THE ORDER OF THE CIT(A) IN DELETING THE ADDITION OF ` 6,45,79,148/-. 6. IN THE RESULT, APPEAL FILED BY THE REVENUE STANDS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 9 TH AUGUST, 2017. SD/ - SD/ - (PAWAN SINGH) (P.K. BANSAL) JUDICIAL MEMBER VICE PRESIDENT MUMBAI, DATED: 9 TH AUGUST, 2017