In Brief
The Supreme Court held that subsidies granted to multiplex theatre complexes in Maharashtra and West Bengal in the form of entertainment duty exemptions and partial remissions constitute capital receipts, not revenue receipts. Although the subsidy was provided through ticket sales after construction commenced, the Court applied the 'purpose test' and found that the scheme's explicit objective was to promote construction of capital-intensive multiplex facilities. The timing, form, and source of the subsidy were held immaterial; only the underlying purpose matters. The Court dismissed the Revenue's appeals, affirming that receipts should be classified based on the scheme's purpose rather than the mechanism of payment.",
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