ITO, Nahan V. M/S Devon hotels, Sirmour

ITA 294/CHANDI/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 95678 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 24-09-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 19-03-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJINDER KAUR
• Assessee Lawyers: MANOJ KUMAR
• Keywords: Rule of consistency

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA MEHROTRA, ACCOUNTANT MEMBER ITA NO.294/CHD/2015 ASSESSMENT YEAR:2008-09 THE ITO VS. M/S DEVON HOTELS NAHAN BEAR BATA BRIDGE PAONTA SAHIB SIRMOUR PAN NO. AAFFD3716R (APPELLANT) (RESPONDENT) APPELLANT BY : SMT. RAJINDER KAUR RESPONDENT BY : SH. MANOJ KUMAR DATE OF HEARING : 24/09/2015 DATE OF PRONOUNCEMENT : 06/11/2015 ORDER PER ANNAPURNA MEHROTRA A.M. THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST T HE ORDER OF LD. CIT(A), SHIMLA, H.P. DT. 29/12/2014. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS ENGAGED IN THE HOTEL BUSINESS AND IS RUNNING A HOTEL IN THE NAME AND STY LE OF HOTEL DEVON, NEAR BATA BRIDGE, PAONTA SAHIB, HIMACHAL PRADESH. DURING THE IMPUGNED ASSESSMENT YEAR THE ASESSEE FILED ITS RETURN OF INCOME DECLARING NI L INCOME, AFTER CLAIMING DEDUCTION OF RS. 34,68,307/- UNDER SECTION 80IC OF THE ACT. THE AO REJECTED THE CLAIM OF THE ASSESSEE HOLDING THAT THE HOTEL RUN BY THE ASSESSEE DID NOT QUALIFY AS A ECO-TOURISM PROJECT FOR THE PURPOSE OF CLAIMIN G DEDUCTION UNDER SECTION 80IC OF THE ACT, AND ADDED BACK THE SUM OF RS. 34,6 8,307/- TO THE INCOME OF THE ASSESSEE. LD. CIT(A) DELETED THE DISALLOWANCE MADE ON THE GROUND THAT IN EARLIER YEARS IN THE ASSESSES OWN CASE RELATING TO ASSESSMENT YEAR 2007-08, THE 2 DEDUCTION UNDER SECTION 80IC HAD BEEN ALLOWED BY TH E LD.CIT(A) AND THE APPEAL OF THE REVENUE HAD BEEN DISMISSED BY THE HON BLE ITAT CHANDIGARH BENCH VIDE ITS ORDER DT. 20/09/2013, IN ITA NO. 764 /CHD/2013. FURTHER LD. CIT(A) HELD THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASS ESSEE BY VIRTUE OF THE DECISION OF THE HONBLE ITAT CHANDIGARH BENCH B IN CASE OF ACIT VS. RAGHUNATH SINGH THAKUR IN [2012] 52 SOT 0210(URO). THUS KEEPING IN VIEW THE JUDICIAL PRONOUNCEMENTS AND TO MAINTAIN JUDICIAL CONSISTENCY THE LD. CIT(A) ALLOWED THE ASSESSES APPEAL. 3. AGGRIEVED BY THE SAME THE REVENUE FILED THIS PRE SENT APPEAL BEFORE US TAKING THE FOLLOWING GROUND: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) HAS ERRED IN DELETING THE ADDITION OF RS. 34,68,307/- MADE BY AO ON ACCOUNT OF DISALLOWANCE OF DEDUCTION U/S 80IC OF THE INCOME TAX ACT, 1961. 4. THE ONLY ISSUE IN THE PRESENT APPEAL IS REGARDIN G THE ALLOWANCE OF DEDUCTION UNDER SECTION 80IC AMOUNTING TO RS. 34,68 ,307/- ON ACCOUNT OF THE FACT THAT THE ASSESSEE IS INVOLVED IN THE ACTIVITY OF THE ECO-TOURISM. IT WAS BROUGHT TO THE NOTICE OF THE BENCH THAT THE ISSUE I S DIRECTLY COVERED BY THE DECISION IN THE ASSESSES OWN CASE BY THE HONBLE IT AT CHANDIGARH IN ASSESSMENT YEAR 2007-08 AND ALSO BY THE DECISION OF THE CHAND IGARH BENCH OF THE ITAT IN THE CASE OF ACIT VS. RAGHUNATH SIGH THAKUR(SUPRA). 5. WE FIND THAT THE ISSUE HAS ALREADY BEEN DECIDED BY THE HONBLE ITAT IN FAVOUR OF THE ASSESSEE IN ITS OWN CASE IN ASSESSMEN T YEAR 2007-08 , IN ITAT NO. 764/CHD/2013(SUPRA), WHERE IN IT WAS HELD AS FOLLOW S : 5. AFTER CONSIDERING THE SUBMISSIONS OF THE LD. DR FOR THE REVENUE AND THE MATERIAL AVAILABLE ON RECORD, WE FIND THAT THE ASSE SSEE WAS RUNNING A HOTEL IN THE NAME AND STYLE OF M/S DEVON HOTELS, IN PAONTA SAHIB IN HIMACHAL PRADESH. THE ASSESSEE HAS CLAIMED DEDUCTION U/S 80IC AMOUNTING T O RS. 8,76,932/-. THE DEDUCTION U/S 80IC AMOUNTING TO RS. 8,76,932/-. THE DEDUCTION WAS DENIED BY THE ASSESSING OFFICER BY OBSERVING THAT THE HOTEL OF TH E ASSESSEE DID NOT QUALIFY THE CONDITIONS OF SECTION 80IC WITHIN THE MEANING OF IT EM NO. 15 IN SCHEDULE XIV OF I.T. ACT AND THE ASSESSEE WAS MERELY RUNNING A MULTI STO REYED COMMERCIAL HOTEL IN THE CITY. THE ISSUE WAS DECIDED BY THE LD. CIT(A) V IDE PARA 4 WHICH READS AS UNDER: THE ISSUE REGARDING THE ADMISSIBILITY OF DEDUCTIO N U/S 80IC OF THE ACT IN THE CASE OF STANDALONE HOTELS OPERATING AS PURE COMMERCIAL C ENTRES STANDS DECIDED BY MY ORDER DATED 04/11/2011 IN APPEAL NO. IT / 238/20 10-11/SML IN THE CASE OF SHRI 3 RAGHUNATH SINGH THAKUR, HOTEL MARINA, THE MALL, SHI MLA FOR THE ASSESSMENT YEAR 2008-09. THE VIEWS HELD BY ME ON THE GIVEN SUBJECT ARE DISCUSSED AT LENGTH IN THE SAID ORDER. HOWEVER, THE HONBLE ITAT CHANDIGARH BE NCH B IN THE CASE OF THE SAID SHRI RAGHUNATH SINGH THAKUR VIDE THEIR ORDER D ATED 22 ND JUNE, 2012 HAS ALLOWED THE DEDUCTION U/S 80IC OF THE ACT ON THE GR OUND THAT THE TERM HOTEL IS INCLUDED INTEREST HE WORD ECO-TOURISM UNDER ITEM 15 IN PART-C OF THE XIV SCHEDULE TO THE I.T. ACT, AND THAT THE SPECIAL PROV ISIONS ARE PROVIDED BY THE STATUTE FOR THE PROMOTION OF TOURISM IN THE STATE O F HIMACHAL PRADESH. WITH A VIEW TO MAINTAIN THE JUDICIAL CONSISTENCY, THE APPEAL OF THE ASSESSEE UNDER CONSIDERATION IS ALLOWED IN REFERENCE TO THE ORDER OF THE HONBLE ITAT, CHANDIGARH 6. ABOVE CLEARLY SHOWS THAT THE LD. CIT(A) HAS SIMP LY FOLLOWED THE ORDER OF THE TRIBUNAL IN CASE OF SHRI RAGHUNATH SINGH THAKUR VS. DCIT. THEREFORE, WE FIND NOTHING WRONG IN THE ORDER OF THE LD. CIT(A) AND CO NFIRM THE SAME. 6. THE LD. CIT(A) IN THE IMPUGNED ASSESSMENT YEAR H AS RELIED UPON THIS ORDER AND THE ORDER IN THE CASE OF SHRI. RAGHUNATH SINGH THAKUR VS. DCIT (SUPRA) WHILE ALLOWING THIS APPEAL. 7. UNDENIABLY THE RULE OF CONSISTENCY AS ENUNCIATED BY THE APEX COURT IN PARASHURAM POTTERY WORKS CO. LTD. VS. ITO 1977 CTR (SC) 32 AND REITERATED IN RADHASWAMI SATSANG VS. CIT (1992) 193 ITR 321 (SC) HAS TO BE FOLLOWED. IT IS A PRINCIPLE OF LAW THAT WHERE A FUNDAMENTAL ASPECT OF A CASE PERMEATING THROUGH DIFFERENT ASSESSMENT YEARS HAS BEEN FOUND A S A FACT, IT IS NOT APPROPRIATE TO CHALLENGE THAT FACT IN A SUBSEQUENT YEAR. PRECEDENTS KEEP THE LAW PREDICTABLE AND MORE OR LESS ASCERTAINABLE AND SHOULD THEREFORE AS FAR AS POSSIBLE NOT BE DEVIATED FROM. THE DEPARTMENT IN TH E PRESENT CASE HAS NOT SHOWN ANY SPECIAL CIRCUMSTANCES WARRANTING DEVIATIO N FROM THE PRINCIPLE OF CONSISTENCY. THEREFORE APPLYING THE RULE OF CONSIST ENCY WE CONFIRM THE ORDER OF THE LD. CIT(A). 8. IN VIEW OF THE ABOVE WE FIND THAT THERE IS NO ME RIT IN THE APPEAL OF THE REVENUE. THEREFORE, THE APPEAL OF THE REVENUE IS T HEREBY DISMISSED. 9. IN THE RESULT APPEAL OF THE REVENUE IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (BHAVNESH SAINI) (ANNAPURNA MEHROTRA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 06/11/2015 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR