DCIT, Dehradun V. M/s Unique Hotel & Restaurant pvt. Ltd., Dehradun

ITA 353/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 3651 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 22-01-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI O. P. KANT, ACCOUNTANT MEMBER I.T.A. NO.353/DEL/2016 ASSESSMENT YEAR: 2012-13 DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2, DEHRADUN. V. UNIQUE HOTEL & RESTAURANT PVT. LTD., 97-RAJPUR ROAD, DEHRADUN. TAN/PAN: AAACU 6531D (APPELLANT) (RESPONDENT) APPELLANT BY: SMT. APARNA KARAN, CIT(DR) RESPONDENT BY: SHRI SANJIV SAPRA, CA DATE OF HEARING: 29 01 2018 DATE OF PRONOUNCEMENT: 31 01 2018 O R D E R PER AMIT SHUKLA, J.M.: THE AFORESAID APPEAL HAS BEEN FILED BY THE REVENUE AGAINST IMPUGNED ORDER DATED 30/11/2015, PASSED BY TH E LD. CIT (APPEALS), DEHRADUN FOR THE QUANTUM OF ASSESSMENT PASS ED U/S.143(3)/148 FOR THE ASSESSMENT YEAR 2012-13. 2. THE REVENUE IS MAINLY AGGRIEVED BY ALLOWING OF C LAIM OF DEDUCTION U/S.80IC OF THE INCOME TAX ACT BY LD. CIT(A) ON THE GROUND THAT THE HOTEL RUN BY THE ASSESSEE FALLS IN THE C ATEGORY OF ECO-TOURISM AND IS NOT SIMPLY A COMMERCIAL HOTEL. 3. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE-COMPAN Y IS RUNNING A HOTEL IN THE NAME AND STYLE OF MADHUBAN A ND HAS I.T.A. NO.353/DEL/2016 2 CLAIMED DEDUCTION U/S.80IC @ 30%, FOR THE YEAR UNDER CONSIDERATION, WHICH IS THE 7 TH YEAR OF THE ASSESSEES BUSINESS. THE INITIAL ASSESSMENT FROM WHICH THE ASSESSEE HAS BEEN C LAIMING DEDUCTION U/S.80IC IS FROM THE ASSESSMENT YEAR 2005-06 . IN RESPONSE TO THE SHOW CAUSE NOTICE TO JUSTIFY THE CLAIM OF DEDUCTION U/S.80IC AMOUNTING TO RS.35,05,042/-. THE ASSESSEE H AS GIVEN VERY ELABORATE SUBMISSIONS BEFORE THE AO FOR ITS ELIG IBILITY OF DEDUCTION U/S.80IC AND SUBMITTED THAT ASSESSEE FULFILLS ALL THE CRITERIA/CONDITIONS LAID DOWN IN THE SAID PROVISION. THE ASSESSEE ALSO GAVE THE MEANING AND DEFINITION OF WORD ECO-TOU RISM AND POINTED OUT THAT IT FULFILLS ALL THE CONDITIONS THAT ITS HOTEL IS ENVIRONMENTAL FRIENDLY AND HAS A VALID LICENSE FOR C ARRYING OUT SUCH ECO-TOURISM. VARIOUS DOCUMENTARY EVIDENCES WERE FILED AND ALSO SUBMITTED THAT IN THE EARLIER YEAR THIS ISSUE IS AL LOWED IN FAVOUR OF THE ASSESSEE. THE RELEVANT DETAILS AND DOCUM ENTS PLACED ON RECORD ARE AS UNDER: > 21 ST CENTURY TOURISM EXCELLENCE AWARD WITH MEDAL BY IND IAN ORGANIZATION FOR BUSINESS RESEARCH & DEVELOPMENT. > NATIONAL GOLD STAR AWARD INDIVIDUAL ACHIEVEMENT & INTELLECTUAL EXCELLENCE & NATIONAL DEVELOPMENT BY INDIAN SOCIETY FOR INDUSTRY & INTELLECTUAL DEVELOPMENT. > RASHTRUYA VIKAS RATAN AWARD (EXCELLENCE IN THEIR R ESPECTIVE FIELD) BY INDIAN SOCIETY FOR INDUSTRY & INTELLECTUAL DEVEL OPMENT. > BHARAT GAURAV AWARD ON THE OCCASION OF NATIONAL S EMINAR ON WORLD PEACE & NATIONAL ECONOMIC DEVELOPMENT BY AL L INDIA ACHIEVERS FOUNDATION, > NATIONAL BUSINESS LEADERSHIP AWARD BY INDIAN ECO NOMIC AWARD BY INDIAN ECONOMIC DEVELOPMENT & RESEARCH ASSOCIATI ON (IEDRA). > MAN OF THE YEAR (2004) BASED ON HIS OUTSTANDING ACCOMPLISHMENTS TO DATE AND THE NOBLE EXAMPLE HE HA S SET FOR HIS PEERS AND ENTIRE COMMUNITY BY THE AMERICAN BIOGRAPH ICAL INSTITUTE AND ITS BOARD OF INDUSTRIAL RESEARCH. > GREEN HOTELIER IN RECOGNITION OF EFFORTS TO IMPRO VE ENVIRONMENT I.T.A. NO.353/DEL/2016 3 PERFORMANCE AT HOTEL MADHUBAN BY INTERNATIONAL HOTE L & RESTAURANT ASSOCIATION ENVIRONMENT AWARD 1996. > GREEN HOTELIER IN RECOGNITION OF EFFORTS TO IMPRO VE ENVIRONMENT PERFORMANCE AT HOTEL MADHUBAN BY INTERNATIONAL HOTE L & RESTAURANT ASSOCIATION ENVIRONMENT AWARD 1997. > THE HONORABLE CHIEF MINISTER OF UTTARAKHAND HAD AWARDED THE AWARD OF UTTARAKHAND ENERGY CONSERVATION AWARD (200 9) IN DECEMBER 2009 TO THE HOTEL. THE ASSESSEE ALSO SUBMITS THAT THE ISSUE OF ALLOWAN CE OF CLAIM FOR DEDUCTION UNDER SECTION 80IC IS FULLY COVERED IN TH E ASSESSEES OWN CASE FOR IMMEDIATELY PRECEDING ASSESSMENT YEARS 200 9-10 AND 2010-11 BY THE ORDER OF CIT (A)-I DEHRADUN VIDE APP EAL NO. 238/CIT(A)-I/DDN/2011-12 AND APPEAL NO NLL2/CIT(A)- I/DDN/2012-13 FOR THE SAKE OF READY REFERENCE, WE E NCLOSE HEREWITH A COPY OF CIT(A) ORDER AT PAGE NO.14 TO 55 . THE SAID ORDER DESERVES TO BE FOLLOWED BY YOUR HONOUR. 4. LD. CIT (A), ALLOWED THE ASSESSEES CLAIM AFTER C ONSIDERING THE ENTIRE MATERIAL PLACED ON RECORD, WHICH HAS BEEN DISCUSSED FROM PAGES 2 TO 22 OF THE APPELLATE ORDER AFTER CONSID ERING THE ENTIRE GAMUT OF FACTS AND RECORD, READ OUT THE SAID OBSE RVATION HAS HOLDING AS UNDER: 6. I HAVE DULY CONSIDERED THE FACTS OF THE CASE AN D THE SUBMISSIONS OF THE ASSESSEE. TO MY MIND, THE MOST I MPORTANT ISSUE IN THIS APPEAL IS TO DECIDE AS TO WHAT EXACTLY THE EXEMPTION UNDER SECTION 80-IC HAS BEEN GRANTED IN RESPECT OF, BY TH E SCHEDULE AND NOTIFICATIONS .IN THE XIV TH SCHEDULE IN ITEM NO. 15 OF PART C, IT READS ECO- TOURISM INCLUDING HOTELS, RESORTS, SPAS, ENTERTAINMENT/AMUSEMENT PARKS AND ROPEWAYS. IT IS IMPORTANT TO UNDERSTAND WHAT THIS IMPLIES. IT IS OBSERVED THAT I N THE CASE OF CIT VS. TAJ MAHAL HOTEL (1971) 82 ITR 44 (SC), THE HON' BLE SUPREME COURT HAS CLEARLY DEFINED THAT THE WORD INCLUDES I S OFTEN USED IN INTERPRETATION CLAUSES IN ORDER TO ENLARGE THE MEAN ING OF THE WORD OR PHRASE OCCURRING IN THE BODY OF THE STATUTE AND WHEN IT WAS SC USED, THESE WORDS AND PHRASES MUST BE CONSTRUED AS COMPREHENDING NOT ONLY SUCH THINGS AS THEY SIGNIFY ACCORDING TO THEIR NATURE AND IMPORT BUT ALSO THOSE THINGS WHICH INTERPRETATION CLAUSE DECLARES THAT THEY SHALL INCLUDE. IN VIEW O F THE SAME WHILE THE ASSESSING OFFICER MAY BE RIGHT IN DEFINING ECO- TOURISM IN THE WAY THAT HE HAS IN A PLAIN UNDERSTANDING OF ENGLISH LANGUAGE, WHEN IT HAS BEEN DEFINED IN AN INCLUSIVE MANNER IN THE XIV TH I.T.A. NO.353/DEL/2016 4 SCHEDULE, IT WAS NOT CORRECT FOR THE ASSESSING OFFI CER TO, IGNORE THAT DEFINITION AND ADOPT A NARROWER INTERPRETATION OF T HE TERM. THUS, AS PER THE SCHEDULE SETTING UP A HOTEL COULD QUALIFY A S AN ECO-TOURISM. THIS IS FURTHER CONFIRMED BY THE FACT THAT IN COLUM N (4) SUB CLASS UNDER NIC CLASSIFICATION 1998 IT IS WRITTEN 55101. SUB CLASS 55101 OF THE NIC CLASSIFICATION 1998 MENTIONS HOTELS AND MOTELS WORDS ONLY. THUS INCLUSION OF SUB CLASS 55101 IN THE SCHE DULE ITSELF, MEANS THAT STANDALONE HOTELS AND RESORTS CAN ALSO Q UALIFY FOR THE DEDUCTION. FURTHERMORE, IN THE NOTIFICATION NO. 1(1 0)/2001 LAYING DOWN NEW INDUSTRIAL AREA AND OTHER CONCESSION OVER THE STATE OF UTTARAKHAND & HIMACHAL PRADESH UNDER CLAUSE 3 FROM (I) TO (III), IT HAS BEEN STATED THAT THRUST SECTOR INDUSTRY AS PER ANNEXURE 2 ARE ENTITLED TO CONCESSION, EVEN THOUGH THEY MAY BE LOC ATED IN THE ENTIRE STATE OF UTTARAKHAND WITHOUT ANY AREA RESTRI CTIONS. THE ECO- TOURISM INCLUDING HOTELS, RESORTS, SPAS, ENTERTAINM ENT/AMUSEMENT PARKS AND ROPEWAYS ARE MENTIONED IN ANNEXURE 2. ACC ORDINGLY, SINCE THE SCHEDULE HAS EXPLAINED THE DEFINITION OF TERM IN AN INCLUSIVE MANNER, THE NARROWER DEFINITION OF ECO-TO URISM AS ADOPTED BY THE ASSESSING OFFICER CANNOT BE HELD AS FEASIBLE FOR THE PURPOSE OF ALLOWING DEDUCTION U/S 80IC(2). FURTHERMORE, IN VIEW OF THE FACT THAT NOTIFICATION NO, 1 (10)/2001 LAYING DOWN NEW I NDUSTRIAL AREA AND OTHER CONCESSIONS OVER THE STATE OF UTTARAKHAND AND HIMACHAL PRADESH, PERMITS THRUST AREA INDUSTRIES TO BE SETUP ANYWHERE IN THE STATES OF UTTARAKHAND AND HIMACHAL PRADESH, A BROAD ER VIEW OF THIS TERM HAS TO BE TAKEN THAT PROVIDES FOR ALLOWIN G CONCESSION TO HOTEL/RESORTS LOCATED WITHIN URBAN AREAS, AS IT APP EARS TO BE THE INTENTION OF THE GOVERNMENT. THE HONBLE ITAT IN TH E CASE OF SHRI BIDHI CHAND SINGHAL VS. ITO, RUDRAPUR HAS INTERPRET ED ECO-TOURISM IN A MANNER TO HOLD THAT THE HOTELS THAT OBTAINS NO -OBJECTION FROM THE POLLUTION DEPARTMENT AND LOCATED WITHIN THE STA TE OF UTTARAKHAND IS A HOTEL ENGAGED IN ECO-TOURISM. IN T HE CASE OF M/S ANCHAL HOTELS (P) LTD. VS. ACIT, CIRCLE-2, DEHRADUN , HONBLE ITAT GONE A STEP FURTHER. IT HAS STATED THAT ONCE THERE IS NO MATERIAL ON RECORD TO SHOW THAT THE POLLUTION DEPARTMENT OF THE GOVERNMENT HAS NOT GIVEN NOC TO THE ASSESSEE, IT CANNOT BE SAID TH AT THE ASSESSEE IS RUNNING HOTEL WHICH IS OUTSIDE THE NORMS PRESCRI BED BY THE POLLUTION DEPARTMENT. ACCORDINGLY IN BOTH THE CASES , THE HONBLE ITAT HAD HELD THAT STAND ALONE HOTEL LOCATED IN URB AN AREAS OF UTTARAKHAND ARE ENTITLED FOR DEDUCTION U/S. 80IC. M Y LEARNED PREDECESSOR HAS ALREADY GIVEN RELIEF TO THE ASSESSE E ON THE BASIS OF THESE JUDGEMENTS IN A PREVIOUS ASSESSMENT YEAR( AY 2009-10 & AY 2010- 11) IN APPEAL NUMBERS 238/CIT(A)-1/DDN-2011-1 2 DATED 23.01.2013 AND 212/CIT(A)1/DDN/2012-13 DATED 2C .02 .2013. SINCE NO SUCH MATERIAL HAS BEEN BROUGHT ON RECORD B Y THE ASSESSING OFFICER TO SUGGEST THAT THE NOC FROM POLL UTION AUTHORITIES HAS BEEN DENIED, I SEE NO REASON TO DEVIATE FROM TH E SAME. IN THE CIRCUMSTANCES IT IS HELD THAT, IN VIEW OF THE ABOVE , THE ASSESSEE HOTEL MAKES THE CUT FOR THE ECO-TOURISM AS DEFINED IN VARIOUS I.T.A. NO.353/DEL/2016 5 SCHEDULES/NOTIFICATION OF THE INCOME TAX ACT & GOVE RNMENT AND AS EXPLAINED BY VARIOUS JUDGEMENT OF THE HONBLE ITAT. IT IS, THEREFORE, ELIGIBLE TO CLAIM DEDUCTION U/S 80IC OF THE I.T. AC T, 1961. ACCORDINGLY, THE DISALLOWANCE AND CONSEQUENT ADDITI ON MADE BY THE ASSESSING OFFICER IS HELD TO BE UNSUSTAINABLE A ND IS DELETED. 5. BEFORE US THE LEARNED COUNSEL FOR THE ASSESSEE, MR . SANJIV SAPRA, SUBMITTED THAT HON'BLE JURISDICTIONAL HIGH COURT, I.E., UTTARAKHAND HIGH COURT IN THE CASE OF CIT VS. ANCHAL HOTELS PVT. LTD., REPORTED IN 287 CTR 233 HAS LAID DOWN THE PRINCIPLES AND CRITERIA FOR ALLOWING DEDUCTION U/S.80IC ON THE HOTELS WHICH ARE ENGAGED IN ECHO-TOURISM BASED ON THIS CRITERIA. LD. C IT(A) IN SUBSEQUENT YEARS HAS ALLOWED THE CLAIM OF DEDUCTION U/ S.80IC. HE ALSO FILED A CHART LISTING THE CRITERIA/PARAMETERS LAID DOWN BY THE HON'BLE HIGH COURT AND ALSO THE RELEVANT DOCUMENTS AND EVIDENCES HAVE BEEN PLACED BY HIM BEFORE US. WE ALS O POINTED OUT THAT IN THE ASSESSMENT YEARS 2009-10 AND 2010-11, THE H ON'BLE TRIBUNAL HAS SET ASIDE THIS ISSUE TO THE FILE OF THE AS SESSING OFFICER TO CONSIDER THE DIRECTION AND PRINCIPLE LAID DOWN BY T HE HON'BLE UTTRAKHAND HIGH COURT. THUS, HE SUBMITTED THAT THE MATTER SHOULD BE EXAMINED IN THE LIGHT OF THE JUDICIAL PRECED ENTS OF THE HON'BLE HIGH COURT AS WELL AS THE TRIBUNAL. 6. ON THE OTHER HAND, LEARNED DR STRONGLY RELIED UPON THE ORDER OF THE ASSESSING OFFICER. 7. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND ON PE RUSAL OF THE MATERIAL REFERRED TO BEFORE US AT THE TIME OF HEARIN G, WE FIND THAT, FIRSTLY , THIS IS THE 7 TH YEAR OF CLAIM OF DEDUCTION AND THE ELIGIBILITY CRITERIA HAS TO BE SEEN IN THE INITIAL YEAR ; SECONDLY , THE ASSESSEE HAS FILED VARIOUS DOCUMENTARY EVIDENCES IN LINE WITH THE I.T.A. NO.353/DEL/2016 6 PRINCIPLES AND CRITERIA LAID DOWN BY THE HON'BLE JUR ISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. ANCHAL HOTEL (SUPRA); AND LASTLY , THE TRIBUNAL ON SIMILAR SET OF FACTS HAVE REMANDED B ACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE TH OSE CONDITIONS AS LAID DOWN BY THE HON'BLE HIGH COURT. SINCE IN THE EARLIER YEARS, MATTER HAS BEEN REMANDED BACK TO THE F ILE OF THE ASSESSING OFFICER TO DECIDE IN LINE WITH THE DIRECTION GIVEN BY THE HON'BLE HIGH COURT, THEREFORE, FOLLOWING THE SAID JU DICIAL PRECEDENTS, WE ALSO REMAND BACK THE MATTER TO THE FILE OF THE ASSESSING OFFICER TO EXAMINE DOCUMENTS IN THE LIGHT OF THE CRITERIA LAID DOWN BY THE HON'BLE HIGH COURT AND ALLOW THE DED UCTION IN ACCORDANCE WITH LAW. WHILE DOING SO, THE ASSESSING OF FICER SHALL GIVE PROPER OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE ITS CASE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JANUARY, 2018. SD/- SD/- [O.P. KANT] [AMIT SHUKLA] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31 ST JANUARY, 2018 PKK: COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR