M/s Hotel & Allied Trdes P.Ltd, Cochin V. DCIT, Ernakulam

ITA 376/COCH/2005

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61572 (ITAT-COCHIN)
• Duration Of Justice: 7 year(s) 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 19-07-2012
• Assessment Year: 1997-1998
• Appeal Filed On: 22-03-2005
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A S BINDHU
• Keywords: Business income
• Section: 234B; 115JB; 56

Judgement Text

1 ITA NO. 376/COCH/2005 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.T.A NO. 376/COCH/2005 (ASSESSMENT YEAR 1997-98) M/S HOTEL & ALLIED TRADES (P) LTD VS THE DY.CIT, CIR.1(1) C/O CASINO HOTEL ERNAKULAM W/ISLAND, COCHIN-3 PAN : NOT AVAILABLE (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI G SARANGAN, SR.COUNSEL / SHRI PK SASIDHARAN RESPONDENT BY : MS. A.S. BINDHU DATE OF HEARING : 19-07-2012 DATE OF PRONOUNCEMENT : 27-07-2012 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF COMMISSIONER OF INCOME-TAX(A)-II, KOCHI DATED 30-11-2004 AND PERTAI NS TO ASSESSMENT YEAR 1997-98. 2. THE FIRST ISSUE ARISES FOR CONSIDERATION IS COMP UTATION OF DEDUCTION U/S 80HHD. 3. WE HEARD SHRI G SARANGAN, THE LD.SENIOR COUNSEL FOR THE ASSESSEE AND MS. A.S. BINDHU, THE LD.DR. 4. THE COMPUTATION OF DEDUCTION U/S 80HHD IN ASSESS EES OWN CASE WAS SUBJECT MATTER OF APPEAL BEFORE THE HIGH COURT IN THE REPOR TED CASE IN HOTEL & ALLIED TRADES (P) LTD VS COMMISSIONER OF INCOME-TAX (2007) 294 ITR 67 (KER). THE KERALA HIGH COURT AFTER 2 ITA NO. 376/COCH/2005 CONSIDERING THE JUDICIAL PRONOUNCEMENTS ON THE SUBJ ECT CAME TO THE CONCLUSION THAT SECTION 80HHD SPECIFICALLY PROVIDES FOR COMPUTATION OF BENEFIT WITH REFERENCE TO PROFIT AND GAINS OF BUSINESS WHICH ONLY MEANS THE ASSESSE ES BUSINESS INCOME AS A WHOLE SHOULD BE RECKONED. IN VIEW OF THE JUDGMENT OF THE KERALA HIGH COURT IN THE ASSESSEES OWN CASE THIS TRIBUNAL FINDS NO ERROR IN THE ORDER OF COMMISSIONER OF INCOME-TAX(A). IN FACT, THE COMMISSIONER OF INCOME-TAX(A) HAS FOLLOWE D THE ORDERS OF THE TRIBUNAL FOR THE ASSESSMENT YEARS 1992-93 AND 1994-95 WHICH ARE CONF IRMED BY THE HIGH COURT IN THE CASE REFERRED ABOVE. THEREFORE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY THE SAME IS CONFIRMED. 5. THE NEXT GROUND OF APPEAL IS WITH REGARD TO LEVY OF INTEREST U/S 234C WHEN THE ASSESSEE WAS LIABLE TO PAY TAX U/S 115JA OF THE ACT . 6. WE HEARD SHRI G SARANGAN, THE LD.SENIOR COUNSEL FOR THE ASSESSEE AND THE LD.DR. THE LEVY OF INTEREST U/S 234C WHILE THE PROFIT COMP UTED U/S 115JA OF THE ACT IS SETTLED BY THE JUDGMENT OF THE APEX COURT IN JCIT VS ROLTA IND IA LTD (2011) 330 ITR 470 (SC). THE SUPREME COURT, AFTER CONSIDERING THE PROVISIONS OF SECTION 115JA / 115JB FOUND THAT INTEREST U/S 234B AND 234C SHALL BE PAYABLE BY THE ASSESSEES WHILE THE TAX IS PAYABLE U/SS 115JA AND 115JB OF THE ACT. IN VIEW OF THE JU DGMENT OF THE SUPREME COURT IN THE CASE OF ROLTA INDIA LTD (SUPRA) THE ORDER OF COMMIS SIONER OF INCOME-TAX(A) IS UPHELD. 7. THE NEXT GROUND OF APPEAL IS WITH REGARD TO ASSE SSMENT OF RS. 1,95,243 AS INCOME FROM OTHER SOURCES. 8. WE HEARD SHRI G SARANGAN, THE LD.SENIOR COUNSEL FOR THE ASSESSEE AND THE LD.DR. ADMITTEDLY, THE ASSESSEE RECEIVED INTEREST FROM BAN K AND DIVIDEND FROM SHARES. IN VIEW OF THE SPECIFIC PROVISION IN SECTION 56 OF THE INCO ME-TAX ACT, INTEREST FROM BANK AND DIVIDEND FROM SHARES HAVE TO BE ASSESSED ONLY AS I NCOME FROM OTHER SOURCES. 3 ITA NO. 376/COCH/2005 THEREFORE, THIS TRIBUNAL DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LOWER AUTHORITY. ACCORDINGLY, THE SAME IS CONFIRMED. 9. THE NEXT ISSUE ARISES FOR CONSIDERATION IS DISAL LOWANCE OF CLUB EXPENSES TO THE EXTENT OF RS. 10,590. 10. WE HEARD SHRI G SARANGAN, THE LD.SENIOR COUNSEL FOR THE ASSESSEE AND THE LD.DR. IN RESPECT OF CLUB EXPENSES WHAT IS ALLOWABLE IS ON LY SUBSCRIPTION FOR CLUB MEMBERSHIP AND NOT THE OTHER EXPENDITURE. THEREFORE, THE ASSE SSING OFFICER IS DIRECTED TO EXAMINE WHETHER RS.10,590 DISALLOWED IS IN RESPECT OF SUBSC RIPTION OF THE CLUB MEMBVERSHIP OR IT RELATES TO OTHER EXPENSES. IF IT IS SUBSCRIPTION F OR CLUB MEMBERSHIP, THE ASSESSING OFFICER SHALL ALLOW THE SAME WHILE COMPUTING THE TOTAL INCO ME. IN CASE THE ASSESSING OFFICER COMES TO THE CONCLUSION THAT THE AMOUNT OF RS.10,59 0 DOES NOT RELATE TO SUBSCRIPTION TOWARDS CLUB MEMBERSHIP THEN THE DISALLOWANCE MADE BY THE ASSESSING OFFICER SHALL STAND CONFIRMED. 11. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 27 TH JULY, 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 27 TH JULY, 2012 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE COMMISSIONER OF INCOME-TAX 4. THE COMMISSIONER OF INCOME-TAX(A) 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH