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2012 (8) TMI 301 - AT - Income TaxDeduction u/s 80IC - assessee engaged in the business of running hotel in the name and style of Hotel Combermere in Shimla in the State of Himachal Pradesh - assessee contended to have incurred substantial expansion and is eco friendly - denial of deduction on ground that running a multi-storeyed commercial hotel in the midst of a city cannot be said to be an eco-tourism project - certificate issued by Department of Tourism only mentioned that Hotel could be considered as a eco-hotel but has not confirmed the same - non-filing of audit report in Form No. No.10CCB - exclusion of certain items from list of substantial expansion and word 'hotel' included in Schedule-XIV was necessarily to be read with word 'eco-tourism' Held that:- From facts on record it is observed that there is approx 63.5% addition to the book value of P&M and we are not in conformity with the observation of the AO in excluding the items of AC, Colour TV, Music Systems and Gym equipments out of the list of plant & machinery as each of the abovesaid items are in the nature of P&M and its costs are to be considered for computing the value of substantial expansion. In any case, even if the said items are excluded from the list of substantial expansion in the P&M, there is addition of 52.94% to the value of P&M as on 1.4.2004. Hence, condition of substantial expansion as stipulated in section 80-IC(8)(ix) are fulfilled. Non-filing of Audit report alongwith return of income - Held that:- Various courts have laid down that the provisions of filing the Audit Report alongwith return of income is directory and not mandatory. In present case, assessee had furnished Audit Report in Form No.10CCB during the course of assessment proceedings and had also filed revised computation during the course of assessment proceedings, hence the said claim merits to be allowed to the assessee. Denial on ground of non-fulfillment of condition of eco-friendly - Held that:- Tribunal in another case has held that in the absence of definition of eco-tourism though the hotel is added into Item No.15 of Part-C is to be construed to be hotel situated in the State of Himachal Pradesh or the State of Uttaranchal having valid licence on the basis of No Objection from the Pollution Department which can be treated to be hotel eligible for deduction u/s 80IC. Since assessee has received Certificate from the Ministry of Tourism and has also a No Objection Certificate issued by the Pollution Control Board, which has not been withdrawn. In view thereof, the assessee is entitled to the benefit of deduction under section 80-IC.
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