D C I T Vs. INOX LEISURE LTD.

JUDGEMENT

(1.) These appeals arise out of the common background. They have been heard together and would be disposed of by this common judgment. Facts being identical, we may notice those as stated in Tax Appeal No. 167 of 2012. For the assessment year 2003-04 revenue has challenged judgment of Income Tax Appellate Tribunal ('the Tribunal' for short) dated 09.09.2011. Following questions have been presented for our consideration:

(2.) With respect to question No. 1, the facts are that the respondent-assessee, a company engaged in the business of operating multiplexes and theaters in Pune and Baroda had, during the previous year relevant to the assessment year under consideration, received an amount of Rs. 1,14,47,905/- by way of exemption from payment of entertainment tax relatable to its Baroda multiplex unit. Such exemption was granted by the State Government under a scheme formulated under a Resolution dated 20.12.1995 titled as "New Package Scheme of Incentive for Tourism Projects 1995 to 2000". The assessee claimed that such tax exemption was granted for covering the capital outlay and therefore, such receipt was capital in nature. The Assessing Officer, however, treated such receipt as revenue receipt primarily on the ground that such assistance was granted to the assessee after the commencement of the operation of the business and such assistance therefore, was for its business operations. Assessing Officer was of the opinion that the object of the incentive was not to enable the assessee to acquire new plant or machinery but for the purpose of carrying the business operations. Likewise, the assessee also received similar entertainment tax exemption of Rs. 1.85 crores (rounded off) from the State of Maharashtra under its own incentive scheme for its multiplex unit situated at Pune. With respect to such incentive also the revenue contended that the receipt was revenue in nature.

(3.) Assessee carried the matter in appeal. CIT(Appeals) reversed the decision by reversing the Assessing Officer's decision and held that the receipt was capital in nature. The Appellate Authority examined the provision of the scheme and noted that the concession in entertainment tax was relatable to the capital investment made. With respect to Pune unit also, the Commissioner held in favour of the assessee.