TMI Blog2009 (9) TMI 675X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 80HHD of the Act – method of computation of deduction – whether deduction under section 80HHD of the Act should be computed based on each approved hotel individually and out of the profit derived from each such hotel - Deduction in respect of earnings in convertible foreign exchange – Held that:- in section 80HHD of the Act the reference is to the business of the assessee which is the business as a whole and as one unit and not by sub- dividing the total income of the business into unit-wise total income and then arriving at the unit-wise overall profit proportionate profit and then adding up the same for arriving at the benefit under section 80HHD of the Act – In favor of Revenue. - 144 of 2002 - - - Dated:- 7-9-2009 - SHYLENDRA KUMAR D. V., ARAVIND KUMAR, JJ. JUDGMENT D. V. Shylendra Kumar J.- 1. This appeal by the Revenue under section 260A of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), is directed against the order dated October 31, 2001, passed in I. T. A. No. 280/Bang/01 by the Income-tax Appellate Tribunal, Bangalore Bench. The Tribunal as per the order had allowed the appeal of the assessee by reversing the findings and con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the profits derived by him from services provided to foreign tourists ; and (ii) so much of the amount not exceeding twenty five per cent. of the profits referred to in sub-clause (i) as is debited to the profit and loss account of the previous year in respect of which the deduction is to be allowed and credited to a reserve account to be utilized for the purposes of the business of the assessee in the manner laid down in sub-section (4) ; (d) for an assessment year beginning on the 1st day of April, 2004, a deduction of a sum equal to the aggregate of- (i) fifteen per cent of the profits derived by him from services provided to foreign tourists ; and (ii) so much of the amount not exceeding fifteen per cent. of the profits referred to in sub-clause (i) as is debited to the profit and loss account of the previous year in respect of which the deduction is to be allowed and credited to a reserve account to be utilised for the purposes of the business of the assessee in the manner laid down in sub-section (4), and no deduction shall be allowed in respect of the assessment year beginning on the 1st day of April, 2005, and any subsequent assessment year : Provided th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of the business (as computed under the head 'Profits and gains of business or profession') the same proportion as the receipts specified in sub-section (2) as reduced by any payment referred to in sub-section (2A), made by the assessee bear to the total receipts of the business carried on by the assessee. (4) The amount credited to the reserve account under clause (b) of sub-section (1), shall be utilised by the assessee before the expiry of a period of five years next following the previous year in which the amount was credited for the following purposes, namely :- (a) construction of new hotels approved by the prescribed authority in this behalf or expansion of facilities in existing hotels already so approved ; (b) purchase of new cars and new coaches by tour operators already so approved or by travel agents ; (c) purchase of sports' equipment for mountaineering, trekking, golf river-rafting and other sports in or on water ; (d) construction of conference or convention centres ; (e) provision of such new facilities for the growth of Indian tourism as the Central Government may, by notification in the Official Gazette, specify in this behalf ; (f) s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) is claimed and allowed in respect of profits derived from the business of a hotel such part of profits shall not qualify to that extent for deduction for any assessment year under any other provisions of this Chapter under the heading 'C.-Deductions in respect of certain incomes', and shall in no case exceed the profits and gains of such hotel. Explanation.-For the purposes of this section,- (a) 'travel agent' means a travel agent or other person (not being an airline or a shipping company) who holds a valid licence granted by the Reserve Bank of India under section 32 of the Foreign Exchange Regulation Act, 1973 (46 of 1973) ; (b) 'convertible foreign exchange' shall have the meaning assigned to it in clause (a) of the Explanation to section 80HHC ; (c) 'services provided to foreign tourists' shall not include services by way of sale in, any shop owned or managed by the person who carries on the business of a hotel or of a tour operator or of a travel agent ; (d) 'authorised dealer', 'foreign exchange' and 'India currency' shall have the meanings respectively assigned to them in clauses (b), (h) and (k) of section 2 of the Foreign Exchange Regulation Act, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examine the following substantial questions of law suggested for examination by the Revenue as arising out of the order of the Tribunal, which reads as under : "1. Whether the Tribunal was correct in holding that deduction under section 80HHD of the Act should be computed based on each approved hotel individually and out of the profit derived from each such hotel ? 2. Whether the deduction under section 80HHD of the Act was correctly computed by the Assessing Officer based on the entire profits and gains derived by the assessee in respect of his entire business ? 3. Whether the appellate authorities recorded a perverse finding that deduction under section 80HHD of the Act in respect of the hotel situated at Port Blair, Bay Island could not be considered as the orders of the Commissioner of Income-tax (Appeals) dated June 19, 2000, had merged with the order of assessment and reached finality with the assessment order passed originally despite the fact that under section 80HHD of the Act deduction was not considered by the Appellate Commissioner ?" 4. The brief facts that has led to the present appeal are that the assessee as a company, inter alia, is engaged in the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fetch good amount of foreign exchange for the country. 7. It is in this background, the present question arises for examination and particularly, being a question directly linked to the kind and the extent of benefit the assessee gets, by complying with the requirement envisaged under section 80HHD of the Act. 8. While there is no dispute that the assessee does carry on the business of running hotels and such activity in turn is also generating good amount of foreign exchange to the country, which are reflected as foreign exchange receipts as disclosed by the assessee an income and in fact go into and form a component of ascertaining the profits and in turn income of the assessee is liable for tax. An assessee should comply with the requirement of section 80HHD of the Act. In terms of this provision such profits attributable to the foreign exchange earning of the assessee qualifies for the benefit in the form of excluding that amount from out of the total income of the assessee, a deduction of a sum which is at a percentage of such profits which amount is varied from year to year. 9. The questions of law eliciting answering in this appeal arises in the course of determi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Windsor RPS Chola Mughal UKP Vadodara Lallgarh Bay Island Umed Bha Sub Total Cheque Total (Rs). (Rs). (Rs). (Rs). (Rs). (Rs). (Rs). (Rs). (Rs). (Rs). (Rs). (Rs). Income : Income from operations 315,399,367 169,768,359 181,796,534 210,075,446 17,701,981 94,360,892 17,330,724 16,540,070 292,508 1,023,265,881 168,747,205 1,192,013,085 Other income 418,950 20,054 71,609 0 19,994 0 0 0 0 530,557 40,912,125 41,442,683 Sales tax 13,991,581 6,750,069 3,341,355 5,025,147 306,521 2,416,532 1,254,787 33,085,992 33,085,992 Luxury tax 45,324,845 0 24,387,917 9,336,287 804,871 8,144,950 0 87,998,870 87,998,870 Expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t not qualifying for the benefit of section 80HHD for the reason that the particular unit with reference to which the amount had been computed, i.e., Bay Island Hotel at Port Blair had not been certified as a hotel eligible for claiming the benefit of section 80HHD of the Act. 16. In respect of this claim though the assessee had indicated that approval of the competent authority of the Bay Island hotel was pending consideration of the orders at the request of the assessee, with the matter having not reached finality the Assessing Officer thought it fit to exclude the same for the assessment year as it was found in fact the assessee had not yet received such recognition. 17. The assessee being aggrieved by the said order of amendment had carried the matter in appeal to the Appellate Commissioner (Appeals) in so far it related to the question of its disallowing this sum of Rs. 8,17,315 as a sum not qualifying for the benefit under section 80HHD in Appeal No. IAT 10/DC-SR-V/CIT(A)-V/99-2000. 18. Before this appeal was disposed of by the appellate authority the asses- see was able to point out that the assessee in fact had produced such a certificate even before the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee's business. It is respectfully submitted that the proposed action is not in accordance with the provisions of law. It is nowhere required under section 80HHD of the Act that the said deduction be allowed with reference to the aggregate profits and the aggregate foreign receipt and total receipt of the assessee's business. It may kindly be appreciated that under various provisions of Chapter VI-A, of the Act, the deduction envisaged therein is to be computed with reference to the eligible undertaking and not to the aggregate business whereby losses or insufficiencies of one unit may adversely affect the deduction claimed with reference to another unit. The assessee has rightly computed under section 80HHD on the basis of the profits, foreign exchange receipts and total receipts of each hotel treating the same as an independent unit. The Supreme Court in the case of CIT v. Canara Workshops P. Ltd. [1986] 161 ITR 320 (SC) in the context of section 80E of the Act held that the deduction under that section was allowable at the aggregate profits of the priority industry unaffected, by the losses suffered in other priority industries owned by the same assessee. In the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ised into three categories, viz. (i) owned properties, (ii) leased properties, and (iii) managed properties. The assessee's right and liabilities as well as income from these different categories of properties are different from each other. The assessee, therefore, regards each hotel located at substantial distance from each other as a separate business. The finds and management of each other are kept separate from each other. In view of the aforesaid and in view of the absence of any specific requirement in section 80HHD to compute the deduction allowable under the provision, with reference to the aggregate business of the assessee, it is respectfully submitted that the rectification proposed in the captioned notice would not be in accordance with law. In addition to the aforesaid, it may kindly be appreciated that even if your honour were to take a view different from that submitted herein above by the assessee, the issue could at best regarded as debatable. As held by the Supreme Court in the case of T. S. Balaram, ITO v. Volkart Brothers [1971] 82 ITR 50 (SC), a mistake apparent from records is one in respect of which there can conceivably be no two opinions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 on account of fixed assets discarded/sold has been included in the computation of total income attached with the return. The claim of the assessee is factually not correct. No such addition has been made in the computation of total income attached with the return. As such the claim of the assessee that this was double addition for the same amount which require rectification is rejected." 23. The sum and substance of which was that even in terms of the provisions of section 80HHD of the Act the computation of the proportionate profit attributable to the foreign exchange has to be necessarily with reference to each unit or each hotel and the total profits that quantifies for the benefit of section 80HHD of the Act, being the sum total in respect of each such unit which otherwise qualifies for the benefit under the terms of section 80HHD. The Assessing Officer has taken up the above stand as the Assessing Officer had indicated the basis, the reason for rectification and also joined the issue on the question as to whether such a correction to the assessing order can be brought within the jurisdiction of rectification as contemplated under section 154 of the Act. 24. In this r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remedy under section 246 of the Act, nevertheless did not meet with much success on the aspect in issue in the present appeal as in terms of the appellate order dated February 15, 2001, copy at annexure B in I. T. A. No. 59/SR-CIT (A)-V/2000-2001, the Appellate Commissioner rejected the contention of the assessee for the reason that for the subsequent assessment year in respect of the very assessee the Appellate Commissioner had taken the view as had been canvassed by the Assessing Officer and, therefore, in so far as this aspect of the matter is concerned had no hesitation in affirming the action of the Assessing Officer in rectifying the original assessment order and disallowing a part of section 80HHD of the Act as had been claimed by the assessee and as had been originally allowed. 28. The assessee carried the matter in further appeal to the Income-tax Appellate Tribunal as enabled under section 253(1)(a) of the Act. 29. In the appeal in so far as the present questions are concerned the asses- see raised two contentions, namely, the order of the assessing authority rectifying the order of the assessing authority being bad in law due to improper exercise of section 154 j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised, before the Tribunal but fails to deal with it, it must be deemed to have been dealt with by it and is, therefore, one arising out of its order. At page 612 of the judgment (supra) it has been observed : 'Where the question itself was under issue, there is no further limitation imposed by the section that the reference should be limited to those aspects of the question which had been argued before the Tribunal. It will be an over refinement of the position to hold that each aspect of a question is itself a distance question for the purpose of section 66(1) of the Act.' 9.(iii) This proposition was further reiterated by the hon'ble Supreme Court in the case of Raja Sharda Narain Singh v. CIT [1968] 68 ITR 209 (SC) and again in the case of CIT v. Indian Molasses Co. P. Ltd. reported in [1970] 78 ITR 474 (SC). 9.(iv) To further fortify our findings we would also like to refer to the Madras High Court decision in CIT v. First Leasing Co. of India Ltd. cited as [1995] 216 ITR 455 (Mad) in which it was held that the question whether investment allowance could be granted to the assessee on bulldozer was squarely before the Tribunal, but the Tribunal did not actually con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s : "(i) English Electric Co. Ltd. v. CIT [2001] 249 ITR 793 (SC) ; (ii) CIT v. Siddaganga Oil Extractions P. Ltd. [1993] 201 ITR 968 (Karn) ; (iii) HMT Ltd. v. Deputy CIT [1996] 59 ITD 76 (Bang) ; (iv) Rajasthan Petro Synthetics Ltd. v. Deputy CIT [1997] 60 ITD 682 (Delhi)." The provisions of section 80HHD of the Act and also 2, 3, 4 rendered in the context of similar other beneficial section 80HHD of the Act all found in Chapter VI-A of the Act. 32. In this view of the matter the Tribunal concluded that the deduction has to be permitted from out of the total income of the assessee as envisaged under section 80HHD of the Act has to be with reference to each approved hotel individual vis-a-vis the profit derived by that particular hotel. The Tri- bunal also opined no deduction is admissible in respect of profits derived from hotel not approved for the purpose of section 80HHD. In other words, the Tribunal understood the matter and, as contended by the asses- see, that the method of computation in terms of sub-section (3) was on the basis of individual unit hotel-wise and for arriving at total receipts quantified for section 80HHD benefit the profit, ascertai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od of working of sub-section (3) of section 80HHD of the Act as understood by the Assessing Officer would have been a debatable issue only if the Assessing Officer had in the first instance examined the claim and had indicated that he is not inclined to allow the claim as put forth by the assessee when the Assessing Officer has not even bestowed his attention due to his ignorance to sub-section (3) of section 80HHD of the Act. The scope for debate in that arises if at all there could have been debate and the matter could have been considered and due to the non-consideration of the actual consideration of sub-section (3) of section 80HHD, the debate itself had been preempted and if cannot consider the question is a debatable question having been considered and had remained as a mistake of law and not the working provision of section 80HHD(3) if had been subsequently given, the debate in such a situation does not arise as in the present case. The learned counsel for the Revenue would further submits that the Tribunal has grossly erred in misapplying the principle of merger and the Tribunal has also grossly misunderstood the principle of merger as to the principle and applicability of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further reliance on the decision of the CIT v. Amritlal Bhogilal and Co. [1958] 34 ITR 130 (SC) wherein the principle of merger had been authoritatively explained by the Supreme Court as one of the leading cases on the subject. 41. On the question of the assessee's claim about the manner of working of sub-section (3) of section 80HHD of the Act for arriving at the benefit under this section Sri Seshachala would submit that the statutory provision is quite clear and unambiguous and to ascertain proportionate profits attributable to the foreign exchange earnings of the assessee is only a ratio of the total profits of the assessee and computed as owned and not with reference to the individual unit, in other words the submission is that the section does not enable the computation in a manner as claimed and suggested on behalf of the assessee for the reason that sub-section (3) mandates that the profits of the assessee attributable to the foreign exchange earnings has to be necessarily in the same proportion as the pro- fits of the assessee as a whole vis-a-vis the total receipts of the assessee from its activity of hotel business. It is, therefore, submitted that when once statute e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n as it emerges on applying the doctrine of merger is too well known to burden with the authorities relied upon by the learned counsel for the assessee, as these decisions by themselves illuminate this aspect of the matter and not necessarily in the manner as contended and as espoused by the learned counsel for the Revenue. 47. In so far as the merits of the order in the sense as to whether the asses- see was entitled to claim deduction under section 80HHD of the Act in terms of the computation as indicated and claimed or in the alternative as to whether sub-section (3) of section 80HHD of the Act in the manner as claimed by the assessee and not indicated by the Assessing Officer and the first appellate authority but only as indicated by the Tribunal, learned counsel would submit that sub-section (3) of section 80HHD of the Act being for the purpose of sub-section (3) of section 80HHD would have to be necessarily understood and interpreted to advance the object as envisaged in sub-section (1) and not to independently understand and interpret the provision which could in any way detract the benefit which otherwise available to the assessee under sub-section (1) of section 80HHD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceipts which is foreign exchange receipts received from guests of the hotel who are foreigners and not citizens of this country. 51. For such purpose Sri Vohra, learned counsel would make a comparison between the provisions of section 80HHC of the Act analogous with the provisions of section 80HHD of the Act and would submit that the interpretation as placed on the provisions of section 80HHC by the Madras High Court in the case of CIT v. Madras Motors Ltd./M. M. Forgings Ltd. reported in [2002] 257 ITR 60 (Mad) commends for acceptance for the purpose of understanding the scope of the provisions of section 80HHD of the Act also and in this decision the Madras High Court had expressed an opinion fully endorsing and accepting the contention as raised in the present appeal on behalf of the respondent-assessee and submits that while clause (a) of sub-section (1) of section 80HHD of the Act provides for a positive qualification and it is indicated that 50 per cent. of the profits derived from the service provided to foreign tourists, is allowed as a deduction from out of the total income of the assessee, which is a taxable income under clause (b) of sub-section (1) of section 80HHD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, there is no question of taking the business turnover or receipt's of all hotels managed by the assessee whether approved for the benefit under section 80HHD of the Act or not and such lumping together of all hotels managed by the assessee whether or not certified by the com- petent authority for the purpose of working out the provisions of section 80HHD would virtually dilute the very benefit which was said to be extended by the Legislature and if the logic of the judgment in Madras Motors' case [2002] 257 ITR 60 (Mad) is to be accepted, it is inevitable that the denominator portion of the formula for arriving at the profits of the assessee attributable to the profits derived from the assessee for the services provided to foreign tourists and so much of the amount gets into the remaining profits as is provided under the clause, it should be to the extent of the turnover of the assessee in respect of the certified hotels only and not inclusive of non-certified hotels. 52. It is in the background of such grounds raised in the memorandum of appeal the substantial questions of law and in the wake of the submissions made and the arguments addressed at the Bar, we are required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isdiction to independently invoke the revocation jurisdiction in respect of a part of the original assess- ment order on the reasoning, that part of the assessment order had not been made the subject-matter of appeal for adjudication and an answer before the first appellate authority. 54. It is only in this context Sri Seshachala, learned senior standing counsel for the Revenue, has placed reliance on the judgment of our High Court in Addl. CIT v. India Tin Industries P. Ltd. reported in [1987] 166 ITR 454 (Karn) and which in turn follows the judgment of the Supreme Court in CIT v. Amritlal Bhogilal and Co. reported in [1958] 34 ITR 130 (SC). 55. On this aspect of the matter, the law is quite well settled by now and while it is true that an order of a lower forum or authority gets merged with the appellate order, when the order of the lower authority is made the subject-matter of appeal, it is also clear by now that the principle of merger is attracted only in so far as it relates to the subject-matter of appeal and merger principle does not get extended to matters not examined by the appellate forum. 56. In this regard, reliance placed by Sri Seshachala, learned senior ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner, a mistake in that part of the order of assessment which was not the subject-matter of the appeal and was left untouched by the Appellate Assistant Commissioner can be rectified by the Income-tax Officer under section 35 of the Indian Income-tax Act, 1922, because the mistake would be his own mistake, which he can always correct under section 35(1). The power to rectify a mistake is conferred on the authorities specified therein by section 154 of the 1961 Act. The principle enunciated in the above two cases is given statutory recognition by section 154(1A). It, therefore, follows that that part of the order of the Income-tax Officer, allowing a development rebate of Rs. 11,011 was not the subject-matter of the appeal before the Appellate Assistant Commissioner, and was left untouched by his order and, therefore, does not merge in the order of the Appellate Assistant Commissioner. The mistake in that part of the order of assessment by the Income-tax Officer, which was not the subject-matter of the appeal, can be rectified under section 154 because the mistake would be the mistake of the Income-tax Officer, and he has always the competence to rectify his mistake under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the record and, there- fore, the assessing authority lacked jurisdiction to invoke section 154 of the Act and modify the order and so far as this agreement is concerned, we find that, in the first instance, the argument of the question being a debat- able point proceeds on the premise that the assessing authority in the first instance had applied his mind for the purpose of consciously extending a particular benefit in respect of claim under section 80HHD of the Act by the assessee and later on that benefit was sought to be varied or altered by invoking the rectification jurisdiction. 61. We find the very premise is not available to the assessee for the simple reason that a perusal of the original assessment order dated March 31, 1999, and the computation as indicated at the end of the assessment order obviously does not show any application of mind on the part of the assessing authority to the intricacies of working out the benefit available to an assessee doing the hotel business or such other business mentioned in the section, getting foreign exchange receipts as part of its business and for qualifying all that the manner of arriving at the figure. 62. In fact, what th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corollary, the losses incurred by such units as had been indicated by the assessee cannot also be added in the computation of the overall receipts of the assessee carrying on the business in the hotel industry and, therefore, opined that the assessee's claim for including receipts from non-recognized or non-certified units of the assessee is to be excluded in arriving at the sum which goes into the denominator part of the formula. 67. It is only because the manner in which the Tribunal had examined the question and had arrived at the answer was not either satisfactory or very convincing, Sri Ajay Vohra, learned counsel appearing for the assessee, has sought to sustain the view taken by the Tribunal with the support of the ruling of the Madras High Court in Madras Motors' case [2002] 257 ITR 60 (Mad) by indicating that an interpretation placed by the Madras High Court on the provisions of section 80HHC of the Act, an analogous provision should be accepted and applied for the present purpose of understanding the working of section 80HHD(3) of the Act. 68. The submission of Sri Seshachala, learned standing counsel appearing for the Revenue, on this aspect of the matter is tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... logic and calls for correction in this appeal. 72. On the other hand, the submission on behalf of the assessee is that the provisions of section 80HHD of the Act being beneficial provision occurring in Chapter VI-A of the Act, it should be given full effect and the benefit under sub-section (1) of section 80HHD of the Act being computed in terms of sub-section (3) of the Act it should not be understood in any different manner than sub-section (1) of section 80HHD of the Act and it is for this purpose reliance was placed by Mr. Vohra, learned counsel for the assessee, on the Division Bench decision of the Madras High Court in Madras Motors' case [2002] 257 ITR 60 (Mad). 73. In answering the question, we are quite conscious that the provision occurs in Chapter VI-A of the Act which is a provision providing for various situations in which an assessee can put forth a claim for deduction of the identified amount or an amount as provided in the respective section from out of total income of the assessee in which event taxable income comes down and the liability for payment of tax also comes down. At the same time, we cannot lose sight of the fact that even Chapter VI-A of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions as used in a larger context and not a limited context. Therefore, all receipts from the business activity of running a hotel necessarily gets into constituting the total receipts which is in the denominator portion of the formula and in so far as the present question is concerned, that is the only area of dispute. 77. The endeavour on the part of the assessee obviously is to reduce the figure in the denominator portion of the formula and while it cannot be characterized that the Revenue is trying to in any way increase it, the Revenue's attempt appears to be to peg it down to the permitted level and not to unduly expand it or enlarge if by a process of referential interpretation such as sub-section (3) of section 80HHD of the Act being interpreted in the context of sub-section (1) of section 80HHD of the Act. 78. If we bear these principles in mind, we notice that the basic requirement of a unit which is in receipt of foreign exchange from foreign tourists being certified or recognized by the prescribed authority acts as an eligibility criteria without which the benefit under section 80HHD of the Act cannot be claimed at all. When once the assessee crosses this thresh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of fixed assets 2,100,915 0 0 0 0 0 0 0 0 2,100,915 0 2,100,915 Trading receipts 0 0 0 Entertainment expenses 104,049 67,375 91,504 1,126,231 360,780 187,157 0 52,861 1,989,957 207,061 2,197,018 Guest house expenses 0 1,229,412 1,229,412 Donations add back 0 0 Disallowance under rule 6D 1,926 41 8,897 17,823 744 4,778 3,602 37,811 139,275 177,086 Unpaid bonus and interest 231,541 405,961 202,677 390,00 161,766 1,391,945 105,944 1,497,889 Unpaid taxes/duties etc 125,932 213,631 339,45 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness of the assessee which is in the nature of hotel industry. The limited area of dispute is whereas the assessee wanted that figure to be a sum total of receipts which were part of the receipts of all recognized certified units of the assessee, the Revenue's stand is that the sum total of the receipts should be necessarily inclusive of all units of the assessee carrying on the business of hotel industry and not confined to the certified hotels as certified by the prescribed authority. 82. While this court had an occasion to examine the application of the formula as it arises in the context of section 80HHC of the Act in the case of Maini Precision Products P. Ltd. v. Joint CIT (I. T. A. Nos. 52 of 2009, 182-185 of 2009 dated 18-8-2009) we indicated the manner of understanding the concept of export turnover vis-a-vis total turnover and the comparison in the present case is the receipts attributable to the foreign exchange receipts and the total receipts of the assessee with all hotel industries put together and the decision may have some indirect bearing as in that ease we have taken the view for the purpose of computation of the total turnover of the assessee should necessa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the precise manner in which it is so provided and not by reading in further words or trying to understand that as one indicating to be con- fined to the recognized units certified by the prescribed authority and as only profits of the recognized units. It is for this reason we are unable to accept the arguments on behalf of the assessee contending that in arriving at the profits of the business of the assessee the profits is only the profits attributable to the recognized units of the assessee earning foreign exchange. 85. The submission on behalf of the assessee that the profits unit-wise should be ascertained first in respect of all recognized or certified units and the proportionate profits of the foreign exchange receipts should be arrived at by keeping that as a base and determine the admissible benefit for sub- section (1) of section 80HHD of the Act in respect of each unit and add up the figure for arriving at the over all benefit under section 80HHD of the Act is not an acceptable argument for the reason that the scheme of the Act does not provide for assessment of the income of the individual units of the assessee and even in terms of the particulars furnished in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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