ITO, Dehradun V. M/s Hotel Doon Castle, Dehradun

ITA 4649/DEL/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5230 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 22-05-2017
• Assessment Year: 2010-2011
• Appeal Filed On: 05-08-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: ABHIMANYU JHAMBA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C , NEW DELHI BEFORE SH. N. K. SAINI, AM AND SH. KULDIP SINGH , JM ITA NO. 4649 /DEL/201 3 : ASSTT. YEAR : 2010 - 11 INCOME TAX OFFICER, WARD - 1(1), DEHRADUN VS M/S HOTEL DOON CASTLE, NIRANJANPUR, NEAR LAL PUL, PATEL NAGAR, DEHRADUN (APPELLANT) (RESPONDENT) PAN NO. A A FFH0529N ASSESSEE BY : SH. ABHIMANYU JHAMB A , CA REVENUE BY : SH. ARUN KUMAR YADAV, SR. DR DATE OF HEARING : 01.08 .201 7 DATE OF PRONOUNCEMENT : 07 . 0 8 .201 7 ORDER PER N. K. SAINI, AM: THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE ORDER DATED 22.05.2013 OF LD. CIT(A) - I , DEHRADUN . 2. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1. WHETHER LD. C IT (A) WAS JUSTIFIED IN LAW IN ALLOWING THE CLAIM OF DEDUCTION U/S 80 - IC OF THE I.T. ACT, 1961 IN THE CASE OF THE ASSESSEE ON THE GROUND THAT THE ISSUE REGARDING ECOLOGICAL BALANCE WAS COVERED IN THE DECISION OF ITAT, DELHI WHICH HELD THAT THERE WAS NO MAT ERIAL ON RECORD TO SHOW THAT POLLUTION DEPARTMENT OF THE GOVT. HAD NOT GIVEN NO OBJECTION TO THE ASSESSEE? 2. THE LD. CIT(A)HAS ERRED IN LAW AND ON FACTS WHILE ALLOWING THE CLAIM OF DEDUCTION U/S 80 - IC OF THE I.T. ITA NO. 4649 /DEL /201 3 HOTEL DOON CASTLE 2 ACT, 1961 EVEN WHILE NO EVIDENCE WAS ADDU CED BEFORE THE CIT(A) REGARDING WHETHER THE ASSESSEE WAS IN POSSESSION OF A NO OBJECTION FROM THE POLLUTION CONTROL DEPARTMENT EVEN THOUGH POSSESSION OF SUCH CERTIFICATE ALONE WAS NOT SUFFICIENT FOR AVAILING THE DEDUCTION? 3. THE LD. CIT(A) HAS ERRED IN L AW AND ON FACTS BY HOLDING THAT POSSESSION OF A VALID LICENSE ON THE BASIS OF NO OBJECTION CERTIFICATE FROM THE POLLUTION DEPARTMENT WAS SUFFICIENT FOR AVAILING THE DEDUCTION U/S 80 - IC AND EXPRESSING THE OPINION THAT IN THE ABSENCE OF DEFINITION OF 'ECO - TO URISM' THE HOTEL AS ADDED INTO THE ITEM NO. 15 OF PART C IS TO BE CONSTRUED TO BE A HOTEL SITUATED IN THE STATE OF HIMACHAL PRADESH OR THE STATE OF UTTARANCHAL HAVING A VALID LICENSE ON THE BASIS OF NO OBJECTION FROM POLLUTION DEPARTMENT WHICH CAN BE TREAT ED TO BE A HOTEL ELIGIBLE FOR DEDUCTION U/S 80 - IC AS PER PROVISIONS OF SECTION 80 - IC WHEREAS THE DEDUCTION IS ADMISSIBLE ONLY IF THE ASSESSEE HOTEL WAS A PART OF AN 'ECO - TOURISM' AS DEFINED IN THE DICTIONARIES AVAILABLE FOR COMMON USE OF THE PUBLIC? 4. TH E LD. CIT(A) HAS ERRED IN LAW BY NOT DECIDING THE ELIGIBILITY OF DEDUCTION U/S 80 - IC OF THE IT. ACT, 1961 ON THE BASIS OF WHETHER THE ASSESSEE HOTEL WAS ACTUALLY AN 'ECO - TOURISM' HOTEL LOCATED IN AN AREA OF UNSPOILED NATURAL BEAUTY AND THEREFORE, NOT A COM MERCIAL HOTEL OPERATED OR RUN IN A CITY? 5. THAT THE ORDER OF THE ID. CIT(A) BE SET ASIDE AND THAT OF THE AO BE RESTORED. ITA NO. 4649 /DEL /201 3 HOTEL DOON CASTLE 3 3. FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF RUNNING OF A HOTEL IN THE NAME AND STYLE OF M/S HOTEL DOON CASTLE AT NIRANJANPUR, NEAR LAL PUL, DEHRADUN AND FILED THE RETURN OF INCOME ON 23.08.2010 DECLARING NIL INCOME. LATER ON, THE CASE WAS SELECTED FOR SCRUTINY. THE AO FRAMED THE ASSESSMENT AT AN INCOME OF RS.35,54,093/ - BY REJECTING THE DEDUCTION U/S 80IC OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) CLAIMED BY THE ASSESSEE. 4. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) WHO ALLOWED THE CLAIM OF THE ASSESSEE BY OBSERVING THAT THE ASSESSEE FULFILLED THE FO LLOWING CONDITION REQUIRED FOR DEDUCTION U/S 80IC OF THE ACT : I) IT IS A HOTEL; II) IT HAS A VALID LICENSE; III) NO OBJECTION CERTIFICATE FROM POLLUTION CONTROL BOARD HAD NOT BEEN DENIED TO IT. THE LD. CIT(A) FOLLOWED THE DECISION OF THE ITAT IN THE CASE O F SH. BIDHI CHAND SINGHAL VS ITO, RUDRAPUR IN ITA NO. 3419/DEL/2009 ORDER DATED 04.11.2010 AND M/S ANCHAL HOTELS (P) LTD. VS ACIT, CIRCLE - 2, DEHRADUN IN ITA NOS. 1800 & 1801/DEL/2010 FOR THE ASSESSMENT YEARS 2005 - 06 AND 2006 - 07 AND ITA NO. 3637/DEL/2011 FO R THE ASSESSMENT YEAR 2007 - 08, ORDER DATED 07.10.2011. ITA NO. 4649 /DEL /201 3 HOTEL DOON CASTLE 4 5. NOW THE DEPARTMENT IS IN APPEAL. THE LD. DR SUBMITTED THAT THE ISSUE IS NOW SETTLED IN FAVOUR OF THE DEPARTMENT AND AGAINST THE ASSESSEE BY THE HON BLE UTTARAKHAND HIGH COURT IN THE CASE OF CIT VS AANCHAL HOTELS (P.) LTD. REPORTED AT (2016) 287 CTR 233 (UTTARAKHAND)/70 TAXMANN.COM 330 (UTTARAKHAND) (COPY OF THE SAID ORDER WAS FURNISHED). IT WAS ALSO STATED THAT THE LD. CIT(A) FOLLOWED THE ORDER OF THE ITAT IN THE AFORESAID REFERRED TO CASE. 6 . IN HIS RIVAL SUBMISSIONS THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN THE CASE OF CIT VS AANCHAL HOTELS (P.) LTD. (SUPRA), THE ISSUE HAS BEEN SET ASIDE TO THE FILE OF THE AO, THEREFORE, THE SAME COURSE TO BE ADOPTED IN THE CASE OF THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT THE ITAT DELHI BENCH D , NEW DELHI VIDE ORDER DATED 05.04.2007 IN ITA NOS. 1726 & 2271/DEL/2013 IN THE CASE OF ACIT, CIRCLE - 2 VS UNIQUE HOTEL & RESTAURANTS PVT. LTD., DEHRADUNN BY FOLLOWING THE JUDGMENT OF THE HON BLE UTTRAKHAND HIG H COURT IN THE CASE OF CIT VS AANCHAL HOTELS (P.) LTD. (SUPRA) HAS SET ASIDE A SIMILAR ISSUE TO THE FILE OF THE AO (COPY OF THE SAID ORDER WAS FURNISHED WHICH IS PLACED ON RECORD). 7 . WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY G ONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS NOT IN DISPUTE THAT THE LD. CIT(A) WHILE ALLOWING THE CLAIM OF THE ASSESSEE FOLLOWED THE DECISION OF THE ITAT DELHI BENCH D , NEW DELHI IN THE CASE OF M/S AANCHAL HOTELS (P.) LTD . VS ACIT, ITA NO. 4649 /DEL /201 3 HOTEL DOON CASTLE 5 CIRCLE - 2, DEHRADUN (SUPRA). THE SAID ORDER WAS A SUBJECT MATTER OF THE DEPARTMENTAL APPEAL BEFORE THE HON BLE UTTRAKHAND HIGH COURT WHEREIN THE ISSUE HAD BEEN SET ASIDE TO THE FILE OF THE AO TO BE DECIDED AFTER PROVIDING OPPORTUNITY TO THE ASSES SEE. THE RELEVANT FINDINGS HAVE BEEN GIVEN IN PARA 36 OF THE ORDER REPORTED AT (2016) 70 TAXMANN.COM 330 (UTTRAKHAND) WHICH READ AS UNDER: 36. EVEN REGARDING THE SITES OF THE ACTIVITIES, WE WOULD THINK THAT IT MUST HAVE SOMETHING TO DO WITH AREAS CLOSE T O NATURE . NO DOUBT, IN THE STATE OF UTTA RAKHAND, THE AREA OF NATURAL BEAUTY AND AREAS CLOSE TO NATURE, OFTEN OVERLAPPED IN CLOSE PROXIMITY WITH DEVELOPED AREAS. THESE ARE ALL MATTERS WE WOULD LEAVE TO THE AUTHORITY. IN VIEW OF THE SAME, THE ORDER OF THE TR IBUNAL CANNOT BE SUSTAINED AND THE MATTER MUST BE REDONE. ACCORDINGLY, THE IMPUGNED ORDERS IN ALL THESE CASES WILL STAND SET ASIDE. A REQUEST IS MADE BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT IF THE MATTER IS SET ASIDE AND REMANDED, IT BE REMANDED NOT T O THE TRIBUNAL BUT TO THE ASSESSING OFFICER. LEARNED COUNSEL FOR THE REVENUE MR. H.M. BHATIA DOES NOT OBJECT TO THIS COURSE OF ACTION. IN SUCH CIRCUMSTANCES, IN VIEW OF THE FACT THAT THE MATTER MUST BE REDONE, WE SET ASIDE THE IMPUGNED ORDERS. THE MATTER I S REMANDED BACK TO THE ASSESSING OFFICER, WHO WILL AFFORD OPPORTUNITY TO ALL THE ASSESSEES AND PASS FRESH ORDERS TAKING NOTE OF THE OBSERVATIONS, WHICH WE HAVE MADE. 8 . WE, THEREFORE, BY RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY THE HON BLE JURISDICT IONAL HIGH COURT IN THE CASE OF CIT VS AANCHAL HOTELS (P.) LTD., (SUPRA) SET ASIDE THIS ISSUE BACK TO THE FILE OF THE AO TO BE DECIDED AS PER THE DIRECTIONS GIVEN BY THE HON BLE JURISDICTIONAL HIGH COURT IN THE AFORESAID REFERRED TO ORDER. ITA NO. 4649 /DEL /201 3 HOTEL DOON CASTLE 6 9 . IN THE RESUL T, THE APPEAL OF THE DEPARTMENT IS ALLOWED FOR STATISTICAL PURPOSES . ( ORDER PRON OUNCED IN THE COURT ON 07 /0 8 /2017 ) SD/ - SD/ - ( KULDIP SINGH ) (N. K. SAINI) JUDICIAL MEMBER AC COUNTANT MEMBER DAT ED: 07 /08 /2017 *SUBODH* COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(APPEALS) 5 . DR: ITAT ASSISTANT REGISTRAR