TMI Blog1992 (9) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... of food in hotel was manufacture or production of articles of the nature as envisaged in section 32A of the Income-tax Act, 1961 ? 2. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in allowing investment allowance to hotel although the Tribunal itself held that the hotel was not primarily an industrial undertaking ?" The additional question for the assessment year 1978-79 is as follows: "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in holding that the luxury tax liability of earlier years arose or accrued in the accounting year in which the provisional assessment for the luxury tax for such earlier years was pas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivity and, therefore, it should have been allowed investment allowance. The Department in support of its contention supported the order of the Commissioner of Income-tax (Appeals) and placed reliance upon the case of Casino (Pvt.) Ltd. [1973] 91 ITR 289 (Ker) and the judgment of the Madras High Court in the case of CIT v. Buhari Sons P. Ltd. [1983] 144 ITR 12. The Tribunal viewed that in the hotel there was manufacture or production of any article or thing within the meaning of section 32A(2) of the Act and by following the decision of the Delhi Bench of the Tribunal in the case of Orient Express Co. (P.) Ltd. v. IAC of I. T. [1985] 14 ITD 506, held that the assessee-company is entitled to investment allowance. In holding that the assessee- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to submit luxury tax returns under protest and to pay tax accordingly. The returns were accordingly submitted for the period from July 25, 1972, to September 30, 1976, and a provisional assessment order dated November 19, 1976, was received by the assessee requiring it to pay the said amount of tax. In the opinion of the Income-tax Officer such liability was not created for the first time. Moreover, it related to earlier years which arose in the relevant accounting years. The assessee did not claim the same in the earlier years. Considering all these facts, the Income-tax Officer disallowed the assessee's claim for Rs. 1,66,981 in respect of luxury tax relating to earlier years. On appeal, the Commissioner of Income-tax (Appeals) did not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act is section 4 which reads as under: "There shall be charged, levied and paid to the State Government a luxury tax by the proprietor of every hotel and restaurant in which there is provision for luxury and such tax shall be calculated- (a) in the case of a restaurant at the rate of an annual sum of rupees three hundred for every ten square metres or part thereof in respect of so much of the floor area of the restaurant which is provided with luxury, and (b) in the case of a hotel at such rate not exceeding fifteen per centum on the daily charges of a room provided with luxury as may be notified by the State Government in the Official Gazette. " The scheme of the Act is such that the quantification of the liability with accuracy i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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