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TMI Blog2018 (1) TMI 1631X X X X Extracts X X X X X X X X Extracts X X X X ..... 14A read with Rule 8D. He ought to have deleted the disallowance made by the assessing officer. b) In concluding that the claim of interest in respect of borrowings to acquire controlling interest in a company engaged in the same business cannot be treated as revenue expenditure and same cannot be allowed u/s 36(1)(iii). He ought to have appreciated that acquisition of controlling interest in a company engaged in the same business is merely an expansion of existing business and hence the interest is allowable u/s 36(1)(iii). c) In not appreciating that the company has not earned dividend on this investment or any other investment and also the said company is subsequently amalgamated with the appellant company and hence no disallowance is required u/s.14A. He ought to have appreciated that in view of the aforesaid facts, no disallowance u/s.14A is required. d) In not appreciating that there is no dividend income which is claimed as not forming part of total income and consequently no disallowance under sec.14A can be made for the relevant assessment year. e) In not appreciating that the appellants own funds and non-interest bearing funds exceeds investment in tax-free secur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in by allowing the entertainment exemption tax of Rs. 102278787/- by ignoring the fact that it was a revenue receipts by observing that the exemptions was availed by the assessee after the commencement of commercial operations of the multiplexes." 9. Learned representatives fairly agree that this issue is also covered by the order dated 10.02.2017 passed by the co-ordinate bench of this Tribunal in assessee's own case for the assessment year 2010-11 wherein the Tribunal has inter alia held as follows :- "10. We have given a thoughtful consideration to the orders of the authorities below qua the rival contentions. The claim of subsidy can be summarized in the following chart:- Sr.No Multiplex at Amount (Rs.) Brief 1 Baroda (Gujarat) 20,616,897 Held to be a capital receipt not exigible to tax for Assessment Years 20O3-04 to Assessment years 2009- 10 by CIT(A) and the same confirmed by ITAT, Ahmedabad for AY 2003-04 to 2005-06 2 Nariman Point (Maharashtra) 33,578,000 Held to be capital receipt not exigible to tax for Assessment Years 2006-O7 to 2009-10 by CIT(A). The applicable policy covered in favour of the appellant by IT AT, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccasion to consider a similar issue before it the facts of which read as under:- * The assessee firm was running a cinema hall. It had shown certain receipts, which included entertainment tax. In the profit and loss account, the assessee had transferred a part of receipts to entertainment subsidy account and claimed same to be exempt from tax being in the nature of capital receipts. * The assessee explained that there was a scheme of the Government of Rajasthan to encourage construction of new cinema halls by providing such a subsidy in the form of entertainment tax for a particular period. A copy of notification issued in this regard was placed before the Assessing Officer. But the Assessing Officer did not agree with the assessee and treated said amount as its income. * The Commissioner (Appeals), however, accepted the plea of the assessee after re lying, inter alia, on the State Government's notification and deleted the entire addition by treating the entertainment subsidy as a capital receipt because said amount had been credited in the books of account of the assessee as a liability under the head "Capital Subsidy". * The Tribunal upheld the order of the Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, dismissed. [Para 19] 14. As no distinguishing decision has been brought on record before us. Respectfully following the decision of the Hon'ble High Court of Rajasthan (supra), we direct the A.O. to treat the amount of Rs. 5731329/- also as a capital receipt. Ground no. 1 is accordingly allowed." 10. We see no reasons to take any other view of the matter than the view so taken by the co-ordinate bench in assessee's own case for the immediately preceding assessment year. Respectfully following the same, we confirm the action of the ld. CIT(A) who had merely followed the stand in the assessment year 2010-11. Grievance of the Assessing Officer is accordingly rejected. 11. Groundno.1 is thus dismissed. 12. In ground no.2, the Assessing Officer has raised the following grievance:- "2) On the facts and in the circumstances of the case and in law, the Ld. CIT(Appeals) erred in by holding Employee's stock option plan amounting to Rs. 1621904/- as an allowable expenditure u/s.37(1) of the Income Tax Act, 1961 without appreciating the findings of Assessing Officer ." 13. Learned representatives fairly agree that this issue is also covered in favour of the assessee by Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X
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