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2022 (2) TMI 588 - AT - Income TaxDeduction u/s.35 AD(5)(aa) - whole of capital expenditure incurred for purpose of development of hotel claimed - Claim denied on delay in getting approval from authority - HELD THAT:- As explanation of the assessee before the Assessing Officer as well as learned CIT(A) that although, the competent authority has accorded approval from subsequent financial year, but the assessee has obtained in principle approval from the competent authority on 30.11.2007 and same was valid for a period of five years and further, the assessee has filed application for approval on 12th May, 2011. The assessee further contended that there was a delay at the Department of Tourism, for processing application filed by the assessee and the assessee had to submit fresh applications for several times and process took considerable time at the Department of Tourism. Therefore, in the process, they have visited our facility only on 19.03.2014 and has granted approval w.e.f 21.03.2014 for the period from 21.03.2014 to 20.03.2019 Therefore, when the assessee has filed application much before date of commencement of business and has also incurred expenditure for specified business, merely for reason for delay in getting approval from authority, expenditure incurred for specified business cannot be disallowed. We are of the considered view that for ascertaining correct facts with regard to claim of the assessee that it was mistake of competent authority in granting approval for relevant assessment year, even though the assessee has filed application in time needs to be examined by the Assessing Officer in light of evidences filed by the assessee. Hence, we set aside order of the learned CIT(A) and restore the issue to file of the Assessing Officer and direct the A.O. to examine claim of the assessee in light of arguments of the assessee that there was no fault from their side in getting approval from competent authority. In case, the Assessing Officer finds that there is a delay from competent authority side in granting approval, then the Assessing Officer is directed to allow claim of deduction u/s. 35AD of the Act, in respect of expenditure incurred for specified business. Appeal filed by the assessee is treated as allowed for statistical purposes
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