TMI Blog2012 (10) TMI 639X X X X Extracts X X X X X X X X Extracts X X X X ..... “eco-tourism status has been granted to any other hotel and which status assessee does not have. In the absence of definition of “eco-tourism” the hotel as added into the 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 a valid licence on the basis of No Objection from Pollution Department which can be treated to be a hotel eligible for deduction u/s 80-IC as per provisions of section 80IC - in favour of assessee. - ITA Nos. 1800 & 1801(Del)/2010 & ITA No. 3637(Del)/2011 - - - Dated:- 7-10-2011 - SHRI I.P. BANSAL AND SHRI K.G. BANSAL JJ. Appellant by : Shri Gautam Jain, C.A Respondent by: Smt. Anusha Khurana, Sr. DR ORDER PER K.G. BANSAL : AM All these appeals have been argued in a consolidated manner by the ld. counsel for the assessee and the ld. senior DR as identical grounds have been raised. Therefore, we think it fit to pass a consolidated order. 1.1 Although the assessee has taken up five grounds in each appeal, the real grievance is projected in ground no. 1 that the ld. CIT(Appeals) grossly erred on facts and in law in upholding the disallowance of the claim of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of Rs. 7,61,618/-. The book value of the plant and machinery as on 01.04.2004 amounted to Rs. 77,158/-. Clause (ix) of sub-section (8) of section 80IC defines the expression substantial expansion to mean increase in investment in plant and machinery by at least 50% of the book value of plant and machinery (before taking depreciation in any year), as on the first day of the previous year in which substantial expansion is undertaken. The admitted position in this respect is that the assessee has taken up substantial expansion. Further, the deduction u/s 80IC is admissible to an assessee where his gross total income includes any profit and gain derived by an undertaking or an enterprise, which inter-alia commences any operation specified in Fourteenth Schedule in the period starting on 07.01.2003 and ending before 01.04.2012. This deduction is also admissible in case of substantial expansion of the undertaking or the enterprise if it takes place within the dates specified above. Coming to the fourteenth schedule, the assessee has relied on Part-C, item no. 15, which reads Eco-tourism including hotels, resorts, Spas, entertainment/amusement parks and ropeways . 3.1 The case of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith minimum damage to the environment and sustain such resources for the future generations so that inter-generational equity is preserved and protected. The appellant hotel is not found to carry out any such activity which could lead to the conclusion that the ecological damage to the area has been done to the minimum possible extent and extra investments and efforts have been made to promote sustainable ecological development of the area in which the hotel activities are being carried out. Under these facts and circumstances of the case and having regard to the aforesaid interpretation of the word hotel succeeding eco-tourism in clause 15 of Part-C of Schedule XIV, I am of the considered opinion that the action of the AO is quite right in rejecting the claim of deduction of appellant u/s 80IC of the I.T. Act, 1961 and accordingly the assessment made by the Assessing Officer by rejecting such claim u/s 80IC of I.T. Act is hereby upheld. 3.2 The first question, which came up for discussion before us is whether, the deduction in respect of an existing hotel is available if substantial expansion thereof takes place within the dates prescribed in the statute? The case of the ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r assessment year 2006-07, dated 04.11.2010, a copy of which has been placed on record and which is authored by my learned brother. The issue has been decided in favour of the assessee. Therefore, following this decision, it is held that the assessee is entitled to deduction u/s 80-IC of the Act. For the sake of ready reference, paragraph nos. 5 and 6 of the aforesaid decision are reproduced below:- 5. We have heard both the parties, gone through the assessment order and order of CIT(A) and relevant provisions which have been referred by the AO and CIT(A). The provisions as contained in section 80IC and as relevant to the case of the assessee are as under:- 80-IC. (1) Where the gross total income of an assessee includes any profits and gains derived by an undertaking or an enterprise from any business referred to in sub-section (2), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains, as specified in sub-section (3). (2) This section applies to any undertaking or enterprise,- (a) (b) which has begun or begins to manufacture or produce any artic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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