Case Law Details
DCIT Vs. Shipra Hotels Ltd. (ITAT Delhi)
In the case of the assessee, the Uttar Pradesh State Government issued a letter to the assessee for grant of entertainment tax subsidy and based on the relevant Scheme of Uttar Pradesh Government, it reveals that subsidy was granted to multiplexes under Uttar Pradesh Government’s Incentive Scheme for “Promotion for construction of Multiplexes” and overall quantum of subsidy is limited to the cost of construction, (excluding cost on land). Entertainment subsidy received by the assessee under Uttar Pradesh Government Scheme for promotion of construction of multiplexes was, thus, capital receipt. The object of grant of subsidy was in order that the persons come forward to construct Multiplex Theater Complexes. The idea being that exemption from entertainment duty was granted for 05 years. It is also provided in the Scheme that if the cost is recovered prior to 05 years, for rest of the period, the entertainment tax would be leviable. As per the Scheme, subsidy equivalent to the cost of building and machinery was allowed to be collected as entertainment tax with the operator/ owner of the said Multiplex, being allowed to retain the amount, equivalent to the eligible amount over a period of 05 years. The issue is, therefore, covered in favor of the assessee by the Judgment of the Hon’ble Supreme Court in the case of CIT-1, Kolhapur vs. M/s. Chaphalkar Brothers, Pune (supra). The Departmental Appeal has no merit and the same is accordingly dismissed. The same findings are relevant in the remaining appeals for the A.Ys. 2009-2010 and 2010-11. These appeals are also dismissed.
ORDER
PER BHAVNESH SAINI, J.M.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
