Madhumita Roy ORDER
Madhumita Roy, Member (J)
1. The instant appeal filed by the Revenue is directed against the order dated 29.07.2016 passed by the Ld. Commissioner of Income Tax (Appeals)- 1, Vadodara arising out of the order dated 25.03.2015 passed by the ACIT, Circle-1(1)(2), Baroda under section 143(3) of the Income Tax Act, 1961 (hereinafter referred as to 'the Act') for Assessment Year 2012-13.
2. The following ground of appeal raised by Revenue has left to be adjudicated by the Co-ordinate Bench while disposing of the appeal on 28.09.2021.
"1. On the facts and in the circumstances of the case and in law, the Ld. CIT(Appeals) erred in treating entertainment tax exemption in respect of Multiplexes of 9,89,90,747/-as capital receipt, not eligible to tax, without appreciating that the subsidy received by the assessee was after completion of the cinema house and commencement of operation and used entirely for the business operation, and therefore, revenue in nature."
3. By and under the order dated 11.04.2023, the Co-ordinate Bench allowed the Miscellaneous Application being M.A. No.11/Ahd/2022 filed by Revenue for adjudication of the above ground.
4. We have heard the rival submissions made by the respective parties and we have also perused the relevant materials available on record.
5. Entertainment tax exemption in respect of Multiplexes of Rs.9,89,90,747/- is subject matter before us.
6. The assessee company filed its return of income on 28.09.2012 showing deemed income under Section 115JB of the Act at Rs.13,46,11,845/-. The same was duly processed. Upon selection of the case for scrutiny through CASS notice under Section 143(2) of the Act dated 06.08.2013 followed by further notice under Section 143(2) r.w.s. 129 and 142(1) of the Act dated 22.08.2014 alongwith detailed questionnaire was issued to the assessee on 10.10.2014.
7. The assessee company mainly engaged in the business of entertainment industry including operating multiplex entertainment complexes and related services including sale of food and beverages, advertisement by screen display, standees etc. giving parking facilities, receipt of charges from retail showrooms, restaurants etc. and also distribution of films and generation of power both captive use and sales to third parties, declared sales/turnover and other income at Rs.424.77 Crores for the year under consideration.
8. According to the assessee, the entertainment tax subsidy is a capital receipt not eligible to tax. Before the Ld. AO, the assessee submitted that the details regarding the treatment of entertainment tax exemption along with the relevant scheme for earlier years and claimed that the facts and circumstances continue to be identical in respect of Multiplexes in question before us. In fact, the Co-ordinate Bench has passed order in favour of the assessee for earlier years. The order passed by the Hon'ble 'C' Bench has been upheld by the Hon'ble Jurisdictional High Court in Tax Appeal Nos. 167, 168 & 169 of 2012 dated 08.01.2013. Hon'ble Jurisdictional High court held as under:
"14. The very purpose of the scheme thus was to give incentive to the multiplex units which were found to be highly capital incentive. The very scheme was considered in case of Commissioner of Income Tax, Kolhapur Vs. M/s. Chaphalkar Brothers, Pune (supra) in which, relying on the decision in case of Sahney Steel and Press Ltd. and ors. vs. Commissioner of Income Tax (supra) and Commissioner of Income Tax Vs. Ponni Sugars and Chemicals Ltd., the Bombay High Court upheld the Tribunal's decision making following observations:
"5. Since the object o........