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2015 (8) TMI 71 - AT - Income TaxEligibility for deduction u/s 80IB denied - whether the initial assessment year is the year in which the assessee started functioning its business or the year in which the prescribed authority granted approval u/s 80IA of the Act for the claiming deduction u/s 80IA of the Act? - Held that:- The assessee is eligible for deduction u/s 80IA (now section 80IB) for ten assessment years from the initial assessment year, i.e. the year in which the business of hotel started functioning. It does not say that the year in which the approval was granted by the prescribed authority. For the purpose of taking the initial assessment year, the approval of the prescribed authority may not be relevant. The assessee may not be eligible for deduction u/s 80IA if the approval of the prescribed authority was not obtained for the initial assessment year. But that does not mean that the initial assessment year has to be excluded from the provisions of the Act. Taxation statute has to be interpreted on the basis of plain language employed by the legislature. A harmonious reading of the Act clearly says that though the approval of the prescribed authority, viz. the DGIT(Exemption) is a pre-condition, the initial assessment year shall be the year in which the assessee hotel started functioning for the purpose of computing ten assessment years for grant of deduction u/s 80IA of the Act. If the assessee could not obtain the approval of the prescribed authority, viz. DGIT (Exemption) for any of the years after started functioning of the hotel, then the assessee may not be eligible for deduction u/s 80IA for those assessment years. The assessee can claim deduction only in respect of the remaining assessment year from the year in which the approval was granted by the prescribed authority. A harmonious reading of section 80IA as it stood at the relevant point of time and the provisions of section 80IB, as it stands now, this Tribunal is of the considered opinion that the initial assessment year is the year in which the assessee started functioning of the hotel and not the year in which the approval was granted by the prescribed authority. Thus the Administrative Commissioner has rightly exercised his revisional jurisdiction since grant of deduction u/s 80IB was not only erroneous but also prejudicial to the interest of revenue. Hence, the order of the Administrative Commissioner is confirmed. - Decided against assessee.
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