ACIT, Dehradun V. Shri Pankaj Nagalia, Dehradun

ITA 1185/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97538 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 30-09-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 01-03-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR KEDIA
• Section: 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SHRI R. S. SYAL, ACCOUNTANT MEMBER AND SMT SUCHITRA KAMBLE , JUDICIAL MEMBER I.T.A .NO.- 1185/DEL/2013 (ASSESSMENT YEA R-2006-07) ACIT CIRCLE-2 13-A, SUBHASH ROAD DEHRADUN (APPELLANT) VS PANKAJ NAGALIA PROP. NAGALIA HOTELS, 13-B, NEW SURVEY ROAD, DEHRADUN AAVPN2861M (RESPONDENT) I.T.A .NO.3634/DEL/13 (ASSESSMENT YEAR-2006-07) ACIT CIRCLE-2 13-A, SUBHASH ROAD DEHRADUN (APPELLANT) VS PANKAJ NAGALIA PROP. NAGALIA HOTELS, 13-B, NEW SURVEY ROAD, DEHRADUN AAVPN2861M (RESPONDENT) APPELLANT BY SH.RAJESH KUMAR KEDIA, JR. DR RESPONDENT BY SH.ANIL JAIN, ADV. ORDER PER SUCHITRA KAMBLE, JM I.T.A .NO.-1185/DEL/2013 (ASSESSMENT YEA R-2006-07) DATE OF HEARING 30.09.2015 DATE OF PRONOUNCEMENT 30.09.2015 THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER DATED 31/12/2012 PASSED BY CIT(A) I, DEHRADUN FOR ASSESSMENT YEAR 20 06-07. 2. THE REVENUE HAS RAISED VARIOUS GROUNDS OF APPEAL THEREIN. 3. THE LD. DR AND AR SUBMITTED THAT THIS APPEAL BEC OMES INFRUCTUOUS. UNDER SECTION 263 OF THE INCOME TAX ACT, 1961, THE COMMISSIONER OF INCOME TAX PASSED ORDER DATED 29.03.2011 SETTING ASIDE THE ASSESSMENT ORDER DATED 16.12.2008. THE COMMISSIONER OF INCOME TAX DIRECTED THE ASSESSING OFFICER TO MAKE THE ASSESSMENT DE NOVO. THE SAID ORDER UNDER S ECTION 263 WAS CHALLENGED BY THE ASSESSEE BEFORE THE ITAT WHICH WA S DISPOSED OF WITH CERTAIN DIRECTION ON 20.04.2012. THE REVENUE WENT IN APPEAL BEFORE THE HONBLE HIGH COURT, UTTARAKHAND AND THE SAME WAS DISPOSED OF ON 31.12.2012 WITH DIRECTION THAT THE COMMISSIONER (APPEALS) SHALL DEC IDE THE SAID APPEAL. IN THE MEANWHILE THE FRESH ASSESSMENT ORDER DATED 30.12.20 11 WAS PASSED AND THE SAME WAS CHALLENGED BEFORE THE CIT(A) BY THE ASSESS EE AND CIT(A) VIDE ORDER DATED 31.03.2013 ALLOWED THE SAME IN FAVOUR OF THE ASSESSEE WHICH IS UNDER CHALLENGE BEFORE THIS TRIBUNAL IN ITA NO. 3634/DEL/ 2013 BY THE REVENUE. 4. IN LIGHT OF THE SUBMISSIONS OF BOTH THE PARTIES, THIS APPEAL BECOMES INFRUCTUOUS. 5. IN RESULT, THE APPEAL OF THE REVENUE I.E. ITA NO . 1185/DEL/2013 STANDS DISMISSED. I.T.A .NO.-3634/DEL/13 (ASSESSMENT YEAR-2006-07) 6. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER DATED 31/03/2013 PASSED BY CIT(A) I, DEHRADUN FOR ASSESSMENT YEAR 2 006-07. 7. THE GROUND OF APPEAL RAISED HEREIN, IS AS FOLLOW S:- 1. THE LD. CIT(A) HAS ERRED IN LAW IN ALLOWING ASS ESSEE DEDUCTION U/S. 80IC OF THE I.T.ACT, 1961 AS THE ASSESSEES HOTEL D OES NOT FULFILL THE CONDITIONS OF ECO-TOURISM AS LAID DOWN IN ITEM NO . 15 OF FOURTEENTH SCHEDULE. 8. THE ASSESSEE IS PROPRIETOR OF M/S. NAGALIA HOTE LS (PACIFIC) AT DEHRADUN AND CLAIMED DEDUCTION UNDER SECTION 80IC OF THE INC OME TAX ACT, 1961 FROM THE ASSESSMENT YEAR 2005-2006 AND THIS IS SECO ND YEAR FOR CLAIMING DEDUCTION UNDER SECTION 80IC OF THE INCOME TAX ACT, 1961. THE ASSESSEE ESTABLISHED A NEW UNIT AND COMMENCED THE O PERATION FROM 22.05.2004. THE ASSESSEE DECLARED A.Y. 2005-06 TO B E HIS INITIAL ASSESSMENT YEAR OF CLAIMING DEDUCTION UNDER SECTION 80IC OF THE INCOME TAX ACT, 1961. IN THIS ASSESSMENT YEAR 2006-2007 HE HAS CLAIMED DEDUCTION UNDER SECTION 80IC OF THE ACT AS THERE WA S PROFIT FROM ELIGIBLE BUSINESS. 9. THE ASSESSING OFFICER VIDE ASSESSMENT ORDER DATE D 30.12.2011 HELD IN PARA 5.5 THAT ..THE ASSESSEE HAVE BEEN EXAMINED. THE ASSESSEE HA S TAKEN ECO-FRIENDLY MEASURES BUT THE ASSESSEE ESTABL ISHED A HOTEL WHICH IS A STAND ALONE HOTEL AND NOT PARCEL OF ECO-TOURISM ACTIVITY/ PROJECT. THEREFORE, DEDUCTION U/S. 80IC OF THE I. T. ACT, 19 61 IS NOT ALLOWED TO THE ASSESSEE. 10. THE CIT(A) HELD IN PARA 1.25 OF THE ORDER AS UN DER: 1.25 ACCORDING TO MY UNDERSTANDING OF THE RATIO OF THE DECISIONS (SUPRA), DEDUCTION SHOULD BE ALLOWED IF THE ASSESSE E SATISFIED THE FOLLOWING CONDITIONS: I. IT IS A HOTEL II. IT HAS A VALID LICENSE III. NOC FROM THE POLLUTION CONTROL BOARD HAS NOT BEEN D ENIED TO IT. SINCE, THE ASSESSEE IN QUESTION FULFILLS ALL THESE CONDITIONS, IT IS HELD, FOLLOWING THE RATIO OF THE DECISIONS OF THE HON. IT AT IN THE CASES OF BIDHI CHAND SINGHAL AND ANCHAL HOTELS (SUPRA) THAT THE ASSESSEE SHOULD BE GIVEN THE BENEFIT OF DEDUCTION U/S 80-IC OF THE I. T. ACT. 11. THE DR SOLELY RELIED UPON THE ASSESSING OFFICER S ORDER IN THIS PARTICULAR CASE. THE DR FURTHER POINTED OUT THAT THE ASSESSEE S HOTEL IS SITUATED IN THE CITY OF DEHRADUN AND EVEN THOUGH IT USES ALL TH E ECO-FRIENDLY MEASURES, IT IS NOT ENTITLED TO DEDUCTION U/S. 80-I C AS IT IS NOT A COMPONENT OR PART AND PARCEL OF ECO-TOURISM ACTIV ITY/PROJECT. THE DR SUBMITTED THAT THE WORD ECO-TOURISM DOES NOT INCL UDES HOTELS. THEREFORE DR SUBMITTED THAT THE ORDER OF CIT(A) BE SET ASIDE AND ASSESSMENT ORDER BE UPHELD. 12. THE AR SUBMITTED THAT THE HOTEL RUN BY THE ASSE SSEE IS COMING UNDER THE PURVIEW OF THE ECO-TOURISM WHICH INCLUDES HOTELS AS PER SCHEDULE XIV PART C SR. NO. 15 OF THE INCOME TAX ACT, 1961 FOR C LAIMING DEDUCTION UNDER SECTION 80IC (2) (B) (II). THE AR RELIED UPON THE ORDERS OF THE ITAT, DELHI BENCHES IN CASE OF SHRI BIDHI CHAND SINGHAL V S. ITO (ITA NO. 3419/DEL/2009 DATED 4.9.2010) AND M/S. ANCHAL HOTEL S (P) LTD. VS. ACIT (ITA NO. 1800 & 1801 (DEL)/2010 DATED 07.10.20 11) WHEREIN IT WAS HELD THAT IN THE ABSENCE OF THE DEFINITION OF ECO- TOURISM THE HOTEL AS ADDED INTO ITEM NO. 15 OF PART C IS TO BE CONSTRUED TO BE HOTEL SITUATED IN THE STATE OF HIMACHAL PRADESH OR THE STATE OF UTTAR ANCHAL 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. 80IC AS PER THE PROVISIONS OF SECTION 80IC. THE ASSESSEE POINTED OU T THE NO OBJECTION CERTIFICATE OF THE POLLUTION DEPARTMENT WHICH IS AN NEXED AT PAGE NO. 28 OF THE PAPER BOOK AS WELL AS THE REGISTRATION CERTI FICATE FOR THE HOTEL DATED 22.05.2004 WHICH IS ANNEXED AT PAGE NO. 23 OF THE PAPER BOOK. THUS THE AR SUBMITTED THAT CIT(A) HAS RIGHTLY ALLOW ED THE DEDUCTION UNDER SECTION 80IC TO THE ASSESSEE. 13. WE HAVE GONE THROUGH THE RECORDS AND PERUSED TH E ARGUMENTS OF BOTH THE COUNSELS. IT IS CLEARLY MENTIONED IN THE SCHEDU LE XIV PART C SR. NO. 15 OF THE INCOME TAX ACT, 1961 THAT ECO-TOURISM I NCLUDES HOTELS IN THE LIST OF ARTICLES OR THINGS OR OPERATIONS FOR AVAILI NG DEDUCTION UNDER SECTION 80IC(2). THE SAME IS REITERATED IN THE CASE LAWS OF SHRI BIDHI CHAND SINGHAL VS. ITO AND M/S. ANCHAL HOTELS (P) LT D. VS. ACIT. SECTION 80IC (2) (B) (II) HAS BEEN INSERTED FOR SOLE PURPOS E OF ESTABLISHING THE ECO- TOURISM INDUSTRY IN RELATION TO THE DEVELOPMENT OF THE SAID REGIONS OF HIMACHAL PRADESH AND UTTARANCHAL/UTTARAKHAND. THE A SSESSEES HOTEL IS FALLING UNDER THE SAID CATEGORY AND IS ENTITLED FOR THE DEDUCTION UNDER SECTION 80IC(2). THUS THE CIT(A) HAS RIGHTLY ALLOWE D THE BENEFIT OF THE DEDUCTION UNDER SECTION 80IC TO THE ASSESSEE. 14. IN RESULT, THE REVENUES APPEAL IS DISMISSED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 30 TH OF SEPTEMBER, 2015. SD/- SD/- (R.S. SYAL) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 30/09/2015 BINITA * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT R EGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 30.09.2015 PS 2. DRAFT PLACED BEFORE AUTHOR 30.09.2015 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 30.09.2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 1 .10 .2015 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK .10 .2015 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.