Law:

Section:

Section 4 of the Income-tax Act, 1961 - Income - Chargeable as Grant-in-aid received by assessee under scheme of State Government, introduced with object to promote construction of new and permanent cinema halls in backward areas as per Government policy dated 21-7-1986, was capital receipt in hands of assessee In view of the decision in Kalpana Palace v. CIT [2005] 275 ITR 365 (All) the grant-in-aid of Rs. 6,07,788.94 received by the assessee under the scheme of the State Government, introduced with the object to promote the construction of new and permanent cinema halls in backward areas as per the Government policy dated 21-7-1986, was capital receipt in the hands of the assessee. JUDGMENT The question of law on which this appeal has been admitted is as follows: "Whether, on the facts and circumstances of the case, the Income-tax Appellate Tribunal was le gally justified in holding that the grant-in-aid of Rs. 6,07,788.94 received by the appellant under the scheme of the State Government, introduced with the object to promote the construction of new and permanent cinema halls in backward areas as per the Government policy dated July 21, 1986, as revenue receipt rather than capital receipt in the hands of the assessee?" An identical question was considered by a Division Bench of this court in the case of Kalpana Palace v. CIT [2005] 275 ITR 365, and answered in favour of…

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