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2016 (1) TMI 368 - ITAT DELHI

2016 (1) TMI 368 - ITAT DELHI - TMI - Rejection of deduction u/s. 80IC(2) - failure to obtain NOC from the Pollution Control Board - Whether the Ld. CIT(A) has erred in law and on facts in allowing the claim as not to appreciate the fact that ecotourism is the condition precedent, to be complied with for hotels for claiming deduction u/s. 80IC? - Held that:- No interference is called for in the well reasoned order passed by the Ld. CIT(A), because the Ld. CIT(A) has decided the issue in dispute .....

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IT [2012 (10) TMI 639 - ITAT, DELHI] for AY 2005-06 to 2006-07 . Moreover, it is a settled law that, a deduction once granted cannot be re-examined in the succeeding assessment years. However, in the assessee’s own case the claim of deduction by the assessee had been examined in the AY 2006-07 and accepted by the Revenue, therefore, it was incumbent upon the Revenue to allow such claim in the succeeding assessment years. - Decided in favour of assessee

Subsidy received from the Govern .....

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tives, hence, revenue Receipt, cannot be sustained, being against the law laid down by Hon’ble Supreme Court of India in Sahney Steel & Press Works Ltd.’s case reported in [1997 (9) TMI 3 - SUPREME Court ] and CIT vs. Ponni Sugars & Chemicals Ltd. reported in [2008 (9) TMI 14 - SUPREME COURT ]. The finding of the Tribunal that the incentives were Revenue Receipt is, accordingly, set aside holding the incentives to be Capital Receipt in the hands of the Assessee. - Decided in favour of assessee. .....

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08 (11) TMI 231 - DELHI HIGH COURT] - Decided in favour of assessee. - I.T.A. No. 767/Del/2013, I.T.A. No. 2417/Del/2013, I.T.A. No. 2592/Del/2013 - Dated:- 4-1-2016 - Shri H. S. Sidhu, Judicial Member And Shri O. P. Kant, Accountant Member For the Petitioner : Sh. T. Vasanthan, Sr. DR For the Respondent : Sh. Gautam Jain, Advocate ORDER Per H. S. Sidhu, JM These are three Appeals, two of them filed by the Revenue and, remaining one has been filed by the Assessee relating to assessment years 200 .....

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owing the claim of the assessee not appreciating the fact that rejection of deduction u/s. 80IC(2) was not based just on failure to obtain NOC from the Pollution Control Board but it was based on the factual facts. 2. Whether the Ld. CIT(A) has erred in law and on facts not to appreciate the fact that ecotourism is the condition precedent, to be complied with for hotels for claiming deduction u/s. 80IC of the I.T. Act, 1961. 3. Whether the Ld. CIT(A) has erred in law and on facts in holding that .....

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dy of ₹ 29,23,251/- received by the appellant from the Government under the Central Capital Investment Subsidy Scheme, 2003 was revenue receipt and not capital receipt and hence not assessable to tax. 1.1 That finding of the learned Commissioner of Income Tax (Appeals) that since the subsidy was received after commencement of production and there was no requirement that the amount had to be .used to acquire new plant and machinery for further expansion of its manufacturing capacity and as .....

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e case of Shree Balaji Alloys vs CIT reported in 333 ITR 335 wherein in almost identical circumstances following the judgment of Apex Court in the case of CIT vs Ponni Sugars and Chemicals Ltd. reported in 306 ITR 392 it was held that the subsidy in capital receipt. 2. That the learned Commissioner of Income Tax (Appeals) has' further erred, both in law and on facts in directing the AO to initiate proceeding u/s 147 read with section 150(1) and 153(3) of the Act for the assessment year relev .....

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t be held that subsidy received represents capital receipt and directions to initiate proceedings u/s 147 read with section 150(1) and 153(3) of the Act are without jurisdiction. It is further prayed that disallowance of claim of deduction under section 80lC of the Act may also be deleted and appeal of the appellant be allowed. REVENUE S APPEALS (ASSESSMENT YEARS 2009-10 & 2010-11) 4. Since common grounds have been raised in both the Revenue s Appeals, for the sake of convenience, we are dea .....

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ith questionnaire was issued to the assessee. In response to the same, the Authorised Representative of the Assessee attended the assessment proceedings from time to time. AO has examined the computerized books of accounts i.e. cash book, ledger, copies of bank statements and bills and vouchers of expenses produced which have been examined on test check basis. The Assessee s Authorised Representative has filed the written submissions and requisite details during the course of assessment proceedi .....

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of the I.T. Act, 1961. The AO held that since the assessee s hotel has not been granted NOC from the Pollution Control Department, therefore, the assessee is not eligible for deduction u/s. 80IC amounting to ₹ 33,09,393/- and accordingly, the AO completed the assessment on a total income of ₹ 33,09,393 (including inform of ₹ 2,120/- after disallowing deduction u/s. 80IC amounting to ₹ 33,07,723/- vide assessment order dated 29.12.2011 passed u/s. 143(3) of the I.T. Act, .....

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nted NOC from the Pollution Control Department, therefore, the assessee is not eligible for deduction u/s. 80IC amounting to ₹ 33,09,393/-. Accordingly, he requested that Appeals of the Revenue may be allowed. He filed a copy of letter dated 19.11.2015 written by Sh. RC Nainwal, ITO, Ward 1(4)(1), Rishikesh addressed to the JCIT (DR), ITAT, New Delhi. The relevant contents of this letter is reproduced below:- Sub:- Hearing in the case of MIs Hotel Vasundhara Palace, (PAN AADFH5808H)- ITA N .....

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e, received in this office on 19.11.2015, alongwith other details. As per version of the assessee, the assessee filed the application for consent to operate its newly constructed hotel on 26.07.20106, to the office of Uttaranchal Environment Protection & Pollution Control Board, Dehradun, with requisite fee and documents. It has further been intimated that after that they had not received any notice of acceptance or rejection of the said application from the office of UEPPCB for many years. .....

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IT(A). He filed two Papers Books one is containing pages 1 to 163 having the details of copy of computation of income alongwith audited financial statement for the FY 2008-09; copy of replies filed before the AO alongwith its enclosures; copy of decision of the Delhi Bench, ITAT in the case of Shri Bidhi Chand Singhal vs. ITO in ITA No. 3419/D/2009 AY 2006-07 etc. and in Anchal Hotels (P) Ltd. vs. ACIT vide order dated 7.10.2011 in ITA No. 1800 & 1801/D/2010 for AY 2005-06 to 2006-07 and ITA .....

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e Supreme Court; various High Courts and the Tribunal. He further stated that the present issues involved in the Revenue s Appeals is squarely covered by the ITAT decision in the case of Bidhi Chand Singhal in ITA No. 3419/D/2009 for AY 2006-07. He further stated it is a settled law that, a deduction once granted cannot be re-examined in the succeeding assessment years. It was stated that claim of deduction by the assessee had been examined in the AY 2006-07 and once such claim stood accepted, i .....

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ceed, since the revenue had accepted this claim even in the assessments framed u/s. 143(3) for the AY 2006-07. He supported this view by the following judgments:- 308 ITR 161 (SC) CIT vs. JK Charitable Trust - 193 ITR 321 (SC) Radha Saomi Satsang vs. CIT - 355 ITR 14 (Del) CIT vs. Delhi Press Patra Prakashan Ltd. - 327 ITR 570 (Del.) CIT vs. Modi Industries Ltd. - 259 ITR 570 (Del) CIT vs. Lagan Kala Upvan - 38 taxmann.com 100 (SC) CIT vs. Excel Industries Ltd. 9.2 Ld. Counsel for the assessee f .....

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s to be construed to be hotel situated in the State of Himachal Pradesh or the State of Uttaranchal having valid license on the basis of no objection from the Pollution Department which can be treated to be hotel eligible for deduction under section 80IC of the Act. In view of the above, he stated that the above observation of the Tribunal clearly supports the claim of the assessee and as such the assessee is entitled to deduction. Moreover, in any case, that once there is no violation of pollut .....

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ed by the Revenue may kindly be dismissed. 10. We have heard the both parties and perused and considered the relevant records available with us especially the impugned orders passed by the Revenue Authorities; submissions of both the parties; and the case laws referred hereinabove. We find that Ld. First Appellate Authority has elaborately discussed the issue in dispute by considering the submissions of the Ld. Counsel of the assessee and adjudicated the issue in dispute as under:- 1.1 Before go .....

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rofits 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 article or thing, specified in the Fourteenth Schedule or commences any operation specified in that Schedule, or which manufactures or produces any article or thing, specified in the Fourteenth Schedule or commences any operation specified in that Schedule and undertakes substantial expansion during the period beginnin .....

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ent year and thereafter, twenty-five per cent (or thirty per cent where the assessee is a company) of the profits and gains". The list of articles/things/operations mentioned in section 80-IC(2), as applicable to the state of Uttarakhand, has been given in Schedule-XIV (Part C) to the Income tax Act. It has 18 entries. The assessee's case is claimed to be falling under the entry at Sl.no.15 which reads as below: "Eco-tourism including hotels, resorts, spa, entertainment/amusement p .....

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not qualify for the said deduction. According to him, the assessee's hotel did not satisfy this benchmark. Without prejudice to that, he observed that the assessee did not have NOC from the Pollution Control Board of Uttarakhand. The dispute is centered on the nature and scope of the abovementioned Entry at SI. No. 15 (Schedule-XIV, Part C). 1.3 The assessee s submission in support of its contention that it is eligible for the deduction in question is summarized below:- I. The deduction form .....

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le, the one which is favourable to the tax payer should be preferred. (Reliance has been placed on a number of decisions of the ITAT and Courts of law in support of this contention). Ill. Schedule-XIV (Part-C, Entry 15) lays down the nature and scope of the activity eligible for the deduction. The activity is 'ecotourism' which is said to 'include' hotels, etc. When the word 'includes' is used while defining a term in law, it has the effect of extending the normal meaning .....

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bsidy'@15% of investment in plant and machinery. This incentive is also given by the Central Government and it is being given to all the hotels without application of classical criteria of ecotourism to hotels. It is being given to all hotels, treating them as a thrust sector industry. The Incentive was operationalised by the Ministry of Commerce and Industry (Department of Industrial Policy and Promotion) Notification dt. 08.01.2003, issued vide F.No.1 (1 0)/ 2001- NER. The list of the Thru .....

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uction u/s 80lC of the IT Act. V. The AO had himself allowed the benefit of deduction to the assessee in the past. Since the facts and circumstances are the same, consistency requires that the benefit should be allowed now also. (Reliance has been placed on a number of decisions of the ITAT and Courts of law in support of this contention). VI. The assessee is observing various environment and pollution control norms and is also providing employment to local people, directly and indirectly, in su .....

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under the Sarai Act. Since this is the statutory frame-work under which the assessee is operating, the condition that it must have NOC from the Pollution Control Board would be an extraneous consideration. In any case, the condition is totally irrelevant for the present purpose since the Income tax Act does not impose any such condition for grant of deduction u/s 8OIC. VIII. The ITAT (Delhi and Chandigarh benches), in the following decisions, have categorically held that a hotel is eligible for .....

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sion has been considered. Beneficial provisions of law should be interpreted liberally. But, that situation arises only after it is established that the assessee is eligible for the deduction in the first place. Basic eligibility has to be decided strictly on the touchstone of the provisions of law. 1.4.2 The proposition that, if two interpretations of a term/provision are possible, the one which is favourable to the tax payer should be preferred, is well-established in law. But, it is not an ab .....

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ferred. Hence, it is to be seen whether two interpretation of the said entry in Schedule-XIV (Part-C, Entry 15) are possible and, if yes, whether the AO's interpretation of the AO and that of the assessee are equally appealing. 1.4.3 The proposition that, when the word 'includes' is used while defining a term in law, it has the effect of extending the normal meaning of the term so as to cover the other terms which may not normally be covered within its meaning but which are included .....

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Capital Investment Subsidy' and deduction u/s 8O-IC are part of the same package of fiscal incentives and the former is being given without any fuss (of the kind made by the AO), the latter should also be given in the same manner, is appreciated. But, if it is established, by independent analysis, that the deduction is not deserved, it could be said that it is the subsidy which was given wrongly. Hence, the fact of subsidy being given may be a relevant consideration while deciding whether th .....

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priate to correct an error than to allow it to perpetuate and thereby cause recurring damage. If, on merits, the AO's action is correct, the fact that it was not taken in the past need not act as a bar in the present. 1.4.6 The contention that the assessee has taken various steps to protect environment and generate employment is alright. But, it may need to be examined whether these steps, amount to ecotourism. 1.4.7 The contention that the assessee has been registered under the Sarai Act an .....

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ry of the legislation. Section 8O-IC of the I.T.Act was incorporated in the Income Tax Act as part of "fiscal......concessions for the special category States of Himachal Pradesh, Uttaranchal, Sikkim and North- Eastern States, in order to give boost to the economy in these States". (Ref. CBDT Circular No.7/2003, dt.05.09.2003). Prior to this, the Central Government had announced a "package of incentives" through the Ministry of Commerce and Industry (Department of Industrial .....

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friendly with potential for local employment generation and use of local resources.' (emphasis added) 2. In pursuance of the above announcement, discussion on Strategy and Action Plan for Development of Industries and generation of employment in the states of Uttranchal and Himachal Pradesh were held with the various related Ministries/agencies on the issue, inter-alia, infrastructure, development, financial concessions and to provide easy market access, The new initiatives would provide the .....

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ial production. II. 100% income tax exemption for initial period of five years and thereafter 30% for companies and 25% for other than companies for a further period of five years from the date of commencement of commercial production. Ill. Capital investment subsidy @ 15% of the investment in plant & machinery, subject to a ceiling of RS.30 lakh. Introduction of section 80lC to the Income tax Act was in pursuance of this declared policy. The 'Thrust Sector Industries' listed at Anne .....

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It is clear that the thrust sector identified for the fiscal Initiative was 'ecotourisrn' and the specific businesses which were identified under the broad head of ecotourism were "Hotels, resorts, spa, entertainment/amusement parks and ropeways". 1.6 This brings us to the concept of 'ecotourism'. Even though 'ecotourism' was mentioned as a thrust sector in the Government of India O.M. dated 07.01.2003 and was also considered eligible for deduction u/s 80-IC of .....

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travel to natural areas that conserves the environment and improves the well-being of local people." Ecotourism and other forms of sustainable travel have their origins with the environmental movement of the 1970s. Ecotourism itself did not become prevalent as a travel concept until the late 1980s. During that time, increasing environmental awareness and a desire to travel to natural locations as opposed to built up tourist locations made ecotourism desirable. Since then, several different .....

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d in the 1992 Agenda 21 for the Travel and Tourism Industry as tourism that "meets the needs of present tourists and host regions while protecting and enhancing opportunities for the future." While "nature-based tourism" simply improves travel to natural places, ecotourism is a type of naturebased tourism that benefits local communities and destinations environmentally, culturally and economically. Ecotourism represents a set of principles that have been successfully implemen .....

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l and cultural awareness and respect. • Provide positive experiences for both visitors and hosts. • Provide direct financial benefits for conservation. • provide financial benefits and empowerment for local people. • Raise sensitivity to host countries' political, environmental, and social climate (Ref. ecotourism.org) The foregoing analysis shows that 'ecotourism' is not the same as 'tourism' simpliciter; it is also not the same as 'nature tourism' .....

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one engaged, directly or indirectly, in the tourism industry, should be allowed to secure short-term gains by resorting to what has been called the darker side of tourism. Neither over-exploitation of natural resources should be permitted nor the carrying capacity of the tourist-sites ignored. VI. Greater emphasis should be laid on eco-tourism whose parameters should be broader than tourism alone. It must help in eliminating poverty, in ending unemployment in creating new skills, in enhancing th .....

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y Objectives' is: Improving India's existing tourism products and expanding these to meet new market requirements". In this connection, it talks of various tourism products as summarized below: • Cultural tourisms • Beach and coastal tourism • Developing islands as international cruse destination • Culinary tourism • Village tourism • Wildlife tourism • Adventure tourism • Recreation and leisure tourism • Setting up world class internatio .....

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ed in the Himalayas, North-Eastern states, Western Ghats, Jharkhand, Andaman & Nicobar Islands, and the Lakshdweep Islands. Tour operators need to be encouraged to promote eco-tourism, which should also be made a grassroots, community based movement, through awareness, education and training of the local community as guides and interpreters. 1.10 The Ministry of Tourism, Government of India has been publishing its Annual Reports containing initiatives taken by it year after year. The Annual .....

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y. This particular initiative of Ministry of Tourism has assumed greater significance in such a backdrop .... (emphasis added) A Steering Committee with representative from all the sectors of the tourism and hospitality industry of India has been constituted to develop draft Sustainable Tourism Criteria which would eventually be adopted by the different sectors of the industry. In the first instance, an attempt has been made to develop the Criteria for the hotel and tour operator sector .... &qu .....

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and is already exerting pressure on our natural and other resources. Considering the importance of developing tourism in ecologically sustainable manner, the Ministry has been laying stress on maintenance of environmental integrity. Ecotourism (also known as ecological tourism) is responsible travel to fragile, pristine, and usually protected areas that strives to be low impact and (often) small scale. It purports to educate the traveler, provide funds for ecological conservation, directly benef .....

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of the area . :. It should identify the likely conflicts between resource use for eco-tourism and the livelihood of local inhabitants and attempt to minimize such conflicts . :. The type and scale of eco-tourism development should be compatible with the environment and sociocultural characteristics of the local community; and .:. It should be planned as a part of the overall area development strategy, guided by an integrated land-use plan while avoiding inter-sectoral conflicts and ensuring sect .....

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treatment plant (STP), rain water harvesting system, waste management system, etc. Once the hotel is operational, it can apply for classification under a Star category to the Hotel & Restaurant Approval Classification Committee (HRACC) of the Ministry. During the physical inspection of the hotel by the HRACC Committee, it is ensured that in addition to the afore-mentioned measures, other measures like pollution control, introduction of non-CFC equipment for refrigeration and air conditioning .....

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ow: "Under the new initiative to evolve Sustainable Tourism Criteria for India, Ministry of Tourism organised a two day National Workshop for the tourism industry stakeholders on 27th-28th July 2010 in New Delhi. The National Workshop was attended by the private stakeholders as well as government officials who are responsible for formulating government policies. The tourism and hospitality industry of the country was well represented in the Workshop. Experts from India and international exp .....

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e constituted a Steering Committee with representatives from all the sectors of the tourism and hospitality industry of India. The Steering Committee deliberated at length to formulate the Sustainable Tourism Criteria. The Committee has finalized the Sustainable Tourism Criteria and Indicators for the Hotel Sector and the Tour Operator Sector as these two form the most important stakeholders in the Tourism Industry. Once adopted, it would be mandatory for all organizations in travel trade and ho .....

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Government laid down "Eco - Friendly Measures to be Adopted by the Hotels" during the period 2011-12. But, that is a general requirement; it does not make a hotel a unit/project of 'ecotourism'. The Sustainable Tourism Criteria have been finalized at late as the financial year 2011-12. It is not known whether they have been adopted yet. This shows that, during the relevant previous year, there was no authoritative and objective basis to determine which hotel was satisfying the .....

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the same as tourism; it is not even the same as nature-tourism. It means travel to areas of natural beauty without damaging the environment and, in the process, supporting the local community. II. Deduction u/s SO-IC has been provided for 'ecotourism' which may include activities such as hotels, etc. III. The term 'ecotourisrn' has not been defined in the Income tax Act. The regulatory framework for 'ecotourism' does not exist nor have objective and legally-binding crite .....

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Act, one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption to tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used .... (Page-92) In matter of tax relief it is for the legislature to decide where to given special benefits. It is not possible for the court to place an elastic interpretation and enlarge the scope of the provision .... (Page-94) In fact, an exempt .....

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invoked at different stages of interpreting it. When the question is whether a subject falls in the notification or in the exemption clause then it being in nature of exception is to be constructed strictly and against the subject but once ambiguity or doubt about applicability is lifted and the subject falls in the notification, then full play should be given to it calls for a wider and liberal construction .... (Page-95) Even through a liberal interpretation has to be given to a beneficial pro .....

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eet a possible injustice .... (Page-99) Technical Words must have their technical sense ascribed to them and not their popular sense uti loquitor vulgus. The principal is of cogency when the words in question represent legal conceptions .... (Page-117) The plain and unambiguous meaning of the statute should not be sought to be altered by the construction sought to be put on it. If the legislature willfully omits to incorporate something of an analogous law in a subsequent statute, or even if the .....

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ning and intention of a statute must be collected from the plain and unambiguous expression used therein rather than from any nations which may be entertained by the court as to what is just or expedient. ... (Page-118) It is a well settled principal in law that the court cannot read anything into a statutory provision which is plain and unambiguous. A statute is an edict of the legislature. The language employed in a statute is the determinative factor of legislative intent. The first and prima .....

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ore than a doubt or ambiguity. The provisions providing for an exemption may be properly construed strictly against the person who makes the claim of an exemption. In other words, before an exemption can be recognized, the person or property claimed to be exempt must come clearly within the language apparently granting an exemption .... (Page-175) In matters of tax relief it is for the legislature to decide where to give special benefits. It is not possible for the court to place an elastic inte .....

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by which the state can maintain itself, any claim on the part of anyone to be exempt from the payment of his full share of taxes on any portion of his property must on that account be clearly defined and founded on plain language. These principles of construction apply as much to "deduction", as to "exemption" since the net result in either case is immunity from taxation .... (Page-176) There is no justification for the view that the exemption provision should be construed wi .....

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achinery section in order to operationalize a charging section, the latter also fails. Principle of interpretation of law remains the same, whether it is applied to a provision which is enacted in order to protect the interest of revenue or one which is enacted to give any benefit to the taxpayer. Hence, following this reasoning, the conclusion that emerges is that, if the provision for deduction has been enacted but the machinery provision to operationalise the same has not been put in place, t .....

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ficial provisions invariably have conditions attached to them and the fulfillment of these conditions is the sine qua non for availing of the benefit. As a corollary to it, it can be said that taxpayer has no inherent right to a deduction. No doubt, once a scheme is introduced, its benefit is to be allowed to every eligible assessee without discrimination. But, if an assessee does not satisfy the prescribed conditions, he cannot claim that he should still be allowed the benefit. These conditions .....

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, it needs to be recognised that, it cannot be expected to satisfy criteria which have not been laid down. But, by the same token, it should also not be assumed that he has satisfied such non-existent criteria. The environmental norms are many. A person may claim that he should get the deduction because he has followed a particular environmental norm. The claim may be denied (by the AO) because he has not followed another one. By such subjective considerations, anyone can claim the deduction and .....

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tax authority to either accept or reject the claim of deduction on the basis of his own understanding of the term 'ecotourism'. The assessee's claim should fail simply because there is no basis on which it can succeed. 1.17 A short discussion on the hotel business may also not be out of place. Hotel is a business of providing boarding and lodging to travelers. This business may go with or without ecotourism. In fact, it may go even without tourism altogether. The term used in Schedul .....

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s tourism may cause harm to the environment and bring misery to the local populace needs no elaboration. That hotels are instruments of reckless tourism in many instances also needs no proof. If hotels, under certain circumstances, can in fact go against the principles of ecotourism, it needs be considered seriously if the deduction which is meant to promote ecotourism can be given to a hotel simply because the term used is 'Eco-tourism including hotels ...' Section 8O-IB(7) of the I.T.A .....

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including hotels ... ', it meant not a simple hotel but something more, it could be argued. In fact, the A.O. has tried to justify his interpretation of section BO-IC from this angle also. 1.18 For running a hotel, the entrepreneur has to seek a license from the State Government; he has also to seek NOC from the Pollution Control Board of the state concerned. These are basic conditions for running a hotel. Simply because a hotel has a valid license from the government and NOC from the Pollut .....

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e eligible for the deduction otherwise, it need not be denied the benefit simply because it does not have the said NOC. A hotel without the NOC does not cease to be a hotel. So many other thrust industries are enjoying the benefit of deduction u/s 8OIC; NOC from Pollution Control Board is not a relevant consideration for that purpose. There does not appear to be any special reason why it should be so in the case of this sector alone. In other words, whether the deduction is to be allowed or not .....

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be interpreted as it exists. Devising criteria and to judge the eligibility of a taxpayer on the basis of such criteria is not permissible for an income tax authority. 1.20 It is also noted that there is a crucial difference between the tourism policy of the Central Government and that of the Government of Uttarakhand. The latter came out with a Tourism Policy which similar classification and identifies 'ecotourism' as a specific segment focusing on promotion of tourism as well as prese .....

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overnment identified "Tourism, Hydro-power, Floriculture, Agro and Food Processing, Handloom, Khadi and Village Industries, etc." as "sectors where Uttaranchal has inherent advantages." Its vision included "To promote Tourism as a focus area and develop Uttaranchal as a premier global tourism destination". In the section dealing with non-fiscal advantages of Uttarakhand, it mentions as below: "The State has a vast tourism potential: adventure, leisure, eco-tour .....

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riod of 5 years from the date of commencement (emphasis added) II. Exemption from payment of entertainment tax to new ropeways for a period of 5 years from the date of commencement III. Exemption from payment of entertainment tax to new amusement parks for a period of 5 years from the date of commencement It is noted that, even though the State Government recognizes that eco-tourism is a specialized kind of tourism, the incentives provided by it are to 'tourism'; not 'ecotourism' .....

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of the State Government while interpreting and applying the provision of the Income tax Act. 1.22 At this stage, it would be apposite to refer to the decision of the Hon'ble ITAT in the case of Bidhi Ch and Singhal (supra). The relevant part of the same reads as below: "From the above section and item no.15 of part C of the Fourteenth Schedule, it can be observed that what is eligible for deduction is eco-tourism which includes inter alia hotels. It has been the contention of the assess .....

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ism inter alia include hotels. No material has been brought on record to show that 'eco-tourisrn' status has been granted to any other hotel and which status assessee does not have. If the logic applied by the AO and CIT(A) is made applicable, then, the hotels which are not having the alleged 'eco-tourism' status cannot be held to be entitled to deduction u/s 80-IC. If none of the hotels can be granted deduction u/s 8O-IC, then, the Item No.15 of Part C of the Fourteenth Schedule .....

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e and the appeal of the assessee is allowed." This reasoning was followed by the Hon. ITAT in its decisions in the cases of Anchal Hotel and of Raghunath Singh Thakur (supra). 1.23 According to the Hon. IT AT, a hotel having a valid license on the basis of No Objection from Pollution Department can be treated to be one eligible for deduction u/s 8O-IC. It has been brought to my notice that, in the State of Uttarakhand, license to set up a hotel is issued by the District Administration under .....

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sion (which is binding on me), I would do it in the fashion it was done by the Hon. ITAT in the cases of Bidhi Chand Singhal and Anchal Hotels (supra). It has been ascertained from the AOs that there is nothing on record to suggest that licences were issued to those assessees on the basis of the said NOCs. It appears that it was assumed by the Hon. ITAT that, if the hotel had a valid license, it would have the said NOC. Since the facts and circumstances of this case are the same and this case ha .....

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e Pollution Control Board has denied NOC to the assessee and, hence, by that reasoning, it cannot be said that the assessee is running a hotel which is outside the norms prescribed by the Pollution Department. The term "Pollution Department of the Government has not given No Objection to the assessee" means that it has denied the NOC. The denial could be on consideration of an assessee's application or by way of suo motu action. If a person has not applied for NOC, he can be accuse .....

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sessment) is rejected. 1.24 It has been submitted by the assessee that there is nothing in the IT Act which would suggest that having the NOC is a necessary condition for the said deduction. It has also been submitted in many cases that the assessees concerned applied for the NOC, often with a retrospective period (covering the previous year in question) and also got the same. It is, however, noticed that the NOCs have been given specifically since the date of the application even though NOC for .....

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en denied. It is negation of negative; not assertion of positive. 1.25 According to my understanding of the ratio of the decisions (supra), deduction should be allowed if the assessee satisfied the following conditions: I. It is a hotel II. It has a valid license Ill. NOC from the Pollution Control Board has not been denied to it. Since, the assessee in question fulfils all these conditions, it is held, following the ratio of the decisions of the Hon. ITAT in the cases of Bidhi Chand Singhal and .....

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s of the Hon. IT AT is applied properly, deduction should not be denied simply because the assessee is unable to show that it has the NOC from the Pollution Control Board. The AO is directed to allow the deduction. 1.26 The assessee has also challenged the charging of interest u/s 234B and 234D of the I.T. Act by the AO. Charging of interest under these sections, if the requisite circumstances exist, is mandatory. But, if the tax liability changes, the interest liability would also change corres .....

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isions rendered by the Hon ble Supreme Court, Hon ble High Court and the decisions of the ITAT. We further find considerable cogency in the assessee s counsel submissions that the present issue involved in the Revenue s Appeals is squarely covered by the ITAT decision in the case of Bidhi Chand Singhal in ITA No. 3419/D/2009 for AY 2006-07 and in Anchal Hotels (P) Ltd. vs. ACIT vide order dated 7.10.2011 in ITA No. 1800 & 1801/D/2010 for AY 2005-06 to 2006-07 and ITA No. 3637/D/2011 (AY 2007 .....

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) CIT vs. Delhi Press Patra Prakashan Ltd. - 216 ITR 548 (Bom) CIT vs. Paul Brothers. 10.2 It is also a settled law that Revenue is bound to apply the rule of consistency. In the present case the claim of the assessee deserves to succeed, since the revenue had accepted this claim even in the assessment framed u/s. 143(3) for the AY 2006-07. Our view is also fortify by the following judgments:- 308 ITR 161 (SC) CIT vs. JK Charitable Trust - 193 ITR 321 (SC) Radha Saomi Satsang vs. CIT - 355 ITR 1 .....

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. Assessee s Appeal No. 2417/Del/2013 (AY 2010-11) 11. With regard to ground no. 1 to 1.2 relating to subsidy received by the assessee from the Government under the Central Capital Investment Subsidy Scheme 2003 was revenue receipt and not capital receipt and hence, not assessable to tax. 11.1 On the issue in dispute Ld. Counsel for the assessee has stated that AO has not disputed that no subsidy received in the instant year. He has in fact held that the assessee had received subsidy of ₹ .....

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e assets in the business and it is used by the assessee for smooth functioning of business. To support this view, he filed the following evidences:- i) Registration dated 18.8.2006 under Central Capital Investment Subsidy Scheme 2003. ii) Copy of Notification issued by the Govt. of India, Ministry of Commerce & Industry. iii) Copy of approval dated 19.2.2007 from Directorate of Industries, Uttranchal in respect of 15 percent Central Investment Subsidy Scheme. Finally, Ld. Counsel for the ass .....

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, the same may be upheld. 12. We have heard both the parties and perused the records, especially the case law relied upon by the Ld. Counsel for the assessee. We are in agreement with the contention of the Ld. Counsel that the issue is squarely covered by the High Court of J&K in the case of Shri Balaji Alloys vs. CIT reported in 333 ITR 335 wherein it was held that the finding of the Tribunal on the first issue that the Excise Duty Refund, Interest Subsidy and Insurance Subsidy were Product .....

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