TMI Blog2018 (3) TMI 1081X X X X Extracts X X X X X X X X Extracts X X X X ..... y set aside the order of the lower authorities on this issue and hold that the investment in building, furniture, fixture in the case of a hotel will qualify to be treated as investment in plant and machinery for the purpose of section 80IC and, therefore, hold that the assessee will be entitled to deduction u/s 80IC of the Act on account of substantial expansion of the unit - Decided in favour of assessee - ITA No. 374/Chd/2017, ITA No. 375/Chd/2017 And ITA No. 376/Chd/2017 - - - Dated:- 19-3-2018 - SHRI SANJAY GARG, JUDICIAL MEMBER AND Ms. ANNAPURNA GUPTA, ACCOUNTANT MEMBER For The Appellant : Sh. Ashwani Kumar And Ms. Kanika Gupta, CAs For The Respondent : Smt. Chanderkanta, Sr. DR ORDER Per Sanjay Garg, Judicial Member: The above captioned appeals relating to the different assessment years have been preferred by the assessee against the separate orders of Commissioner of Income Tax (Appeals), [hereinafter referred to as CIT(A) ] Shimla dated 30.12.2016. 2. The sole issue raised in all the appeals is as to whether the assessee who is engaged in running of a hotel is entitled to deduction u/s 80IC of the Income-tax Act, 1961 (in short ' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 15 Eco-tourism including hotels, resorts, spa, entertainment / amusement parts and ropeways - 55101 4. A perusal of the above provisions reveals that these are special provisions for promotion of certain class of industry in the specific states of Himachal Pradesh and Uttaranchal. The deductions under the provisions of section 80IC of the Act is admissible to an undertaking who has begun or begins to manufacture or produce any article or thing, as specified in XIV schedule or commences any operation as specified in the Schedule and even the benefit of deduction is also available to the Industries who are already in operation and undertakes substantial expansion during the period as mentioned in sub clause (2) to Section 80IC (2)(b)(ii) of the Act. In the XIV schedule, one of the activity is mentioned as Eco-tourism including hotels, resorts, spa, entertainment / amusement parts and ropeways . The claim of the assessee was that it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot entitled to benefit of deduction under section 80IC of the Act. 7. The Revenue has not preferred any appeal against the findings of the CIT(A) holding the assessee as an Eco-tourism project as provided at item No.15 in Schedule XIV of the I.T. Act. However, the assessee has come in present appeal agitating the action of the CIT(A) holding that the expansion in the hotel unit which mainly consisted of investment in building, furniture and fixtures did not constitute involvement of plant and machinery. 8. Since the Revenue has not come in appeal against the findings of the CIT(A) holding that the assessee was an eco-tourism project, hence, the sole question left for adjudication before us is, as to whether in a hotel business the investment made in building, furniture and fixture can be said to constitute substantial expansion as per the provisions of section 80IC of the Act?. 9. The Ld. Counsel for the assessee has relied upon the findings of the Hon'ble Supreme court in the case of CIT Vs. Anand Theatres (supra) wherein the question before the Hon'ble Supreme Court was whether building which was used as a hotel or a cinema theatre could be given depreciation a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ures, so specially required for carrying out such activity, and is eligible for deduction on its commencement of activity u/s 80IC of the Act, then under such circumstances, for the purpose of the meaning of substantial expansion the expansion in such building, furniture and fixtures would constitute an investment in plant and machinery for the purpose of claim of deduction u/s 80IC of the Act. The term plant and machinery in view of the special provisions of section 80IC of the Act, specifically enacted for promotion of certain industrial undertaking or enterprise in the special category of states of Himachal Pradesh and Uttaranchal will include the technically designed building and furniture, fittings and fixtures therein in case of hotel wherein otherwise no plant and machinery is required. We find support, in our view, from the decision of the Hon'ble Supreme court in the case of CIT Vs. Karnataka Power Corporation (2001) 247 ITR 268 (SC) wherein the Hon'ble Supreme Court has held that the question whether a building can be treated as plant, basically, is a question of fact and where it is found as a fact that a building has been so planned and constructed as to s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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