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1 - 10 of 23 (0.40 seconds)Income Tax Officer vs Shreejee Chitra Mandir on 28 July, 2005
8.6. As far as the decision of Shreeji Chitra Mandir (supra) is concerned, as cited by the Id.DR
Mr.Gupta, the Respected Co-ordinate Bench Indore has examined the scheme. The subsidy was to be
given in installments as determined by the administration. Each eligible cinema house was required to
file application in prescribed form to the Collector. After the receipt of application from the owners of
the cinema houses, the Collector of the District will make such enquiries as he may consider it
13 ITA Nos. 272, 273, 441 & 1097/A/2010
. A.Ys. 2006-07 & 2007-08
necessary and obtain necessary information to make recommendations to the Commissioner of Excise,
who in turn was to make the payment of subsidy under intimation to the Collector. It was also found by
the Tribunal that if the owners of the Cinema Houses have taken loan from Rashtriya Film
Development Corporation or M.P.State Film Development Corporation, then the subsidy would be
given through them. On that factual finding, a distinction was drawn by the Tribunal that there was a
difference between subsidising the capital outlay and subsidising the running of the business. A clear-
cut findings was given that grant-in-aid received by that assessee was not related to any asset or
capital outlay, it was received after completion of the cinema house and it was to assist the assessee to
run the business of cinema house. It was held that subsidy was not given for construction but the
payment of subsidy was nothing but supplementary trade receipt. Ld.DR has therefore relied upon
these two decisions, however, we have noticed that the facts were distinct from the facts from the case
in hand, hence hereby hold that these two precedents being distinguishable on facts therefore do not
apply on the facts of this case.
Section 3 in Rajasthan Entertainments and Advertisements Tax Act, 1957 [Entire Act]
Section 80IB in The Income Tax Act, 1961 [Entire Act]
Rajasthan Entertainments and Advertisements Tax Act, 1957
M/S. Sahney Steel & Press Works Ltd. ... vs Commissioner Of Income Tax.Andhra ... on 19 September, 1997
In view of Hon'ble Supreme Court judgment in the case of P.J. Chemicals Ltd. (supra); ITAT
Vishakhapatnam Bench judgment in the case of Sasisri Extractions Ltd. (supra) and the department
itself proposed that there was no obligation on assessee to utilize it for any specific purpose will not be
hit by Explanation 10 to Sec. 43(1). We are, therefore, of the view that entertainment subsidy being for
the promotion of cinema/ multiplex industry; only because the methodology adopted is to cap it to
capital cost of assets will not mean to reduce the cost of asset directly or indirectly in terms of
Explanation 10 to Sec. 43(1). This ground of the assessee is allowed.
A.K. Jain And Brothers (Huf) vs Income-Tax Officer on 27 December, 1991
8.7. We have examined the true nature of the "subsidy" in the hands of the assessee. Having regard to
the nature of subsidy and in the light of the order of the Hon'ble Bombay High Court, we hereby affirm
the finding of Id.CIT(A). Moreover, the facts of the case in hand is akin to the facts of M/s Chaphalkar
Brothers ( supra) therefore holds the field, consequently this issue now stood settled in assessee's
favour by the Hon'ble Bombay High Court. We decide accordingly and these grounds are dismissed.
Commnr. Of Income Tax, Madras vs M/S. Ponni Sugars & Chemicals Ltd on 16 September, 2008
NB:-[ * The latest citation is CIT vs. Ponni Sugars and Chemicals Limited (2008) 306
IRR 392 (SC)]
12 ITA Nos. 272, 273, 441 & 1097/A/2010
. A.Ys. 2006-07 & 2007-08
8.3 The Tribunal has examined the scheme and then opined that it was a benevolent scheme for the
benefit to the exhibitors/ multiplex owners. The subsidy was meant to grant economic assistance to set
up a multiplex. The subsidy was collected as entertainment duty on sale of tickets. It was found by the
Tribunal that such collection was not a trade receipt of the assessee because the entertainment duty
was collected on behalf of the Government. It was collected under a specific direction and it was also
utilized under those directions. The said collection of duty had no nexus with the day-to-day function
or running of the multiplex. The collection of the duty was not with an objective to supplement the
trade receipt. The subsidy was meant for the recoupment of a capital expenditure already incurred
by the assessee. It was held that there can be two ways for the disbursement of the subsidy, one that the
Government can given a cash subsidy or in the alternate, second, by a specific scheme can allow a
beneficiary to retain any cess or duty collected on behalf of the Government. Due to this reason, the
manner through which a duty is collected is of no consequence. Thereafter, a conclusion was drawn as
under:-
Dy. Cit, Range 12(1) vs Samta Marine Kakinada on 24 August, 2007
14. With respect to the Multiplexes located at Jaipur in the State of
Rajasthan, we find that ld. CIT(A) after considering the Government
notifications no. 293 and 383 (supra) had denied the claim of Assessee
but however, the Hon'ble High Court of Rajasthan in the case of CIT vs.
Samta chavigarh (2014) 44 Taxmann. com 337 (Raj) after referring to the
notification S.O. no. 293 of Government of Rajasthan and considering
the decision of Hon'ble Supreme Court in the case of Ponni Sugar and
Chemicals Ltd. and the decisions of other High Courts held as under:-
Cit vs Meghdoot Village Products (P.) Ltd. on 20 September, 2006
27.1. Therefore, the distinction is that in the above cited precedent, the assessee was setting up a new
project for the purpose of manufacturing of a new product. On the other hand, in the present appeal,
now before us, the assessee is running a multiplex cinema theatre and the expenditure was in respect
of a new project for the same line of business of running of multiplex and cinema theatre.
Undisputedly, the expenditure was towards project report and consultation fees, etc. On identical facts
in the case of CIT vs. Priya Village Roadshows Ltd, (supra), the Hon'ble Delhi High Court has held as
under:-