Apex Court held ‘Purpose test’ is crucial factor to determine whether subsidy is capital or revenue in nature

CIT vs. Chaphalkar Brothers Pune (Supreme Court) Brief Facts of the Case The Assessee, Chaphalkar Brothers Pune, one of the appellant from batch of appeals from Maharashtra and West Bengal, was engaged in the business of Multiplex Theatre in Pune, Maharashtra. The Govt. of Maharashtra, by way of ordinance before 4th December, 2001, introduced subsidy scheme in the form of exemption of entertainment duty in Multiplex Theatre Complexes newly set up, for a period of three years, and thereafter payment of entertainment duty @25% for the subsequent two years. The object and reason of the ordinance...