TMI Blog2011 (12) TMI 247X X X X Extracts X X X X X X X X Extracts X X X X ..... v, B.R. Jain, JJ. Amit Shukla for the Appellant. Vivek Gupta for the Respondent. ORDER Sunil Kumar Yadav, Judicial Member This appeal is preferred by the assessee against the order of the ld. CIT(A) on various grounds related to the issue of rejection of claim of deduction amounting to Rs. 31,20,148 under section 80IB(7)(a) of the Income-tax Act, 1961 (hereinafter called as "the Act"). 2. During the pendency of the appeal, the assessee moved an application seeking admission of following additional grounds:- "(5) BECAUSE wholly without prejudice to the grounds raised at Sl. No. 1, 2 3, that its claim for deduction under section 80IB should have been allowed as per clause (a) of sub section (7), of the said section where by appellant is entitled for claim for deduction @ of 50% of the profit derived from the Hotel business by the authorities below, the appellant otherwise also fulfills the requisite conditions given under sub clause (b) of sub section (7) of section 80IB whereby deduction should have been allowed @ 30% of the profit as the requisite certificate/approval was duly given by the prescribed authority under Rule-18BBC(1) of the Income Tax Rules ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y admitting the additional grounds as its adjudication does not require any investigation or appreciation of facts. 4. The ld. counsel for the assessee has also placed reliance upon various judgments of various High Courts in support of his contention that the duty always cast on the Income Tax Officer to apply relevant provisions of the Act for the purpose of determining the true figure of the assessee's taxable income and consequential tax liability. The reliance was also placed on the judgments of the Hon'ble Apex Court in the case of Jute Corpn. India Ltd. v. CIT [1991] 187 ITR 688/[1990] 53 Taxman 85 and National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383 (SC) wherein it has been held that an Appellate Authority have all the powers which the original authority may have in deciding the question before it subject to restrictions or limitations, if any, prescribed by the statutory provisions and in the absence of any statutory provision, the Appellate Authority is vested with all the plenary powers which the subordinate authority may have in the matter. Therefore, the additional grounds be admitted and be adjudicated on merits. 5. The ld. D.R. has strongly opposed the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity. If the assessee fails to claim benefit of set-off cannot relieve the Income Tax Officer of his duty to apply section 24 in an appropriate case. We have also carefully gone through the judgments of the Hon'ble Apex court in the cases of Jute Corpn. India Ltd. (supra) and National Thermal Power Corpn. Ltd. (supra) in which it is categorically held that an Appellate Authority have all the powers which the original authority may have in deciding the question subject to certain restrictions or limitations. The Appellate Authority can also admit new grounds having satisfied that for the bona fide reasons it could not have been agitated before the lower authorities. 8. In the instance case though the assessee has filed approval of exemption under section 80IB(7)(b) of the Act, but the assessee confined itself only with the claim under section 80IB(7)(a) of the Act. Therefore, we are of the view that it was the duty of the Assessing Officer to examine the claim of the assessee under section 80IB(7)(b) of the Act in the light of the documents filed before him. Therefore, we are of the view that the additional grounds should be admitted and be adjudicated upon. Accordingly we admit t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of proposal to the Asstt. Director General (H R) by the Director General of Income Tax (Exemption) for grant of approval for exemption under section 80IB(7)(a) of the Act does not mean that the approval has been granted to the assessee. Therefore, in the absence of approval by the prescribed authority, deduction under section 80IB(7)(a) of the Act cannot be granted. 14. With regard to the alternative plea of the ld. counsel for the assessee is concerned, the ld. D.R. has submitted that the assessee has not made any claim for benefit of exemption under section 80IB(7)(b) of the Act before the Assessing Officer. Therefore, the claim of the assessee under section 80IB(7)(b) of the Act cannot be entertained by the second appellate authority. In support of his contention, the ld. D.R. has placed reliance upon the judgment of the Hon'ble Apex Court in the case of Goetze (India) Ltd. v. CIT [2006] 284 ITR 323/157 Taxman 1. 15. In rebuttal, the ld. counsel for the assessee has submitted that the Hon'ble Delhi High Court in the case of CIT v. Jai Parabolic Springs Ltd. [2008] 306 ITR 42/172 Taxman 258 after examining the judgment of Hon'ble Apex court in the case of Goetze (India) Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prescribed authority is on record before the Assessing Officer, he should have examined the claim of deduction under section 80IB(7)(b) of the Act in the light of relevant evidence, but he did not do so. 19. We have also carefully examined the provisions of sections 80IB(7)(a) and 80IB(7)(b) of the Act and we find that the percentage of deduction allowable depends upon the location of the Hotel. If the Hotel is located in a hilly area or a rural area or a place of pilgrimage or such other place as the Central Government may, having regard to the need for development of infrastructure for tourism in any place and other relevant considerations, specify by notification in the Official Gazette and such hotel starts functioning at any time during the period beginning on the 1st day of April, 1990 and ending on the 31st day of March, 1994 or beginning on the 1st day of April, 1997 and ending on the 31st day of March, 2001, it would be entitled for deduction @ 50% of the profit and gains derived from business of such Hotel for a period of 10 consecutive years beginning from the initial assessment year subject to fulfillment of certain conditions. The other Hotels which are located in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Calcutta, Chennai, Delhi or Mumbai, which has started or starts functioning on or after the 1st day of April, 1997 and before the 31st day of March, 2001: Provided further that the said hotel is approved by the prescribed authority for the purpose of this clause in accordance with the rules made under this Act and where the said hotel is approved by the prescribed authority before the 31st day of March, 1992, shall be deemed to have been approved by the prescribed authority for the purpose of this section in relation to the assessment year commencing on the 1st day of April, 1991; (b) thirty per cent of the profits and gains derived from the business of such hotel as is located in any place other than those mentioned in sub-clause (a) for a period of ten consecutive years beginning from the initial assessment year if such hotel has started or starts functioning at any time during the period beginning on the 1st day of April 1991 and ending on the 31st day of March, 1995 or beginning on the 1st day of April, 1997 and ending on the 31st day of March, 2001: Provided that nothing contained in this clause shall apply to a hotel located at a place within the municipal jurisdiction ..... 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