Commissioner Of Income Tax-I, Kolhapur v. Mis. Chaphalkar Brothers Pune

[2017] 12 S.C.R. I 083 COMMISSIONER OF INCOME TAX-I, KOLHAPUR MIS. CHAPHALKAR BROTHERS PUNE (Civil Appeal Nos. 6513-6514 of2012) DECEMBER 07, 2017 [R. F. NARIMAN AND NAVIN SINHA, JJ.] Bombay Entertainment Duty Act, 192 3 -Bombay Entertainment Duty (Amendment) Act, 2001 - s.3(13)(c),(f-l) -Subsidy scheme introduced by the State to encourage development · of Multiplex Theatre complexes - Nature of - Assessment officer and the commissioner held that scheme took the form of a charge on the gross value of ticket and contributed towards the day to day running expense, therefore it was in the nature of a revenue receipt - Howeve1; Tribunal and the High Court held that subsidy was for the p111pose of helping the growth of an industry, hence it was in the nature of capital receipt - Held: If the object of the assistance under the Subsic~v Scheme is to enable the asses.see to set up a new unit or to expand the existing unit then the receipt of the subsidy is on capital account - It is the object for which the subsidy/assistance is given which determines the nature of the incentive subsidy - The form of the mechanism through which the subsidy is given is irrelevant - In instant case, the object of the grant of the subsidy was in order that persons come forward to construct Multiplex Theatre Complexes, the idea being that exemption from entertainment du~v for a period of three years and partial remission for a period of two years should go towards helping the ind11st1y to set up such -highly capital intensive entertainment centers Appeals filed by Department accordingly dismissed. Dismissing the appeals filed by the Department, the Court HELD: 1. The object of introducing the necessary amendments in the Bombay Entertainments Duty Act to effectuate the aforesaid subsidy scheme was first done by way of an ordinance before 4th December, 2001, which ultimately became part of an Amendment Act. The said scheme was thereafter set out in the form of an amendment to the Statute contained in Section 3(13) A sub-clause (c) after which a new sub-clause f(l) was set out. In addition, a new sub-clause (13) was also inserted after Section 3. [Paras 2 and 3] (1086-D; 1087-D-E] 2. Applying the purpose test contained in both Sahney Steel 1083