M/s Shirkar Hotel Pvt. Ltd., Lucknow V. The ACIT, Lucknow

ITA 744/LKW/2011

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 6550 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-05-2014
• Appeal Filed By: Assessee
• Bench Allotted: A
• Next Hearing Date: 12-05-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 19-12-2011
• Court: TRIBUNAL
• Department Lawyers: ALOK MITRA
• Assessee Lawyers: A K GUPTA
• Keywords: Opportunity of being heard; Competent authority
• Section: 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI. A. K. GARODIA , ACCOUNTANT MEMBER ITA NO S . 744 & 745/LKW/2011 ASSESSMENT YEAR S : 2006 - 07 AND 2008 - 09 M/S SHIRKAR HOTEL PVT. LTD. 6, SHAHNAJAF ROAD LUCKNOW V. ASSTT. COMMISSIONER OF INCOME - TAX RANGE II LUCKNOW PAN: AAFCS4475D (APP ELL ANT) (RESPONDENT) ITA NO. 344/LKW/2013 ASSESSMENT YEAR: 2009 - 10 M/S SHIRKAR HOTEL PVT. LTD. 6, SHAHNAJAF ROAD LUCKNOW V. JOINT COMMISSIONER OF INCOME - TAX RANGE VI LUCKNOW PAN: AAFCS4475D (APP ELL ANT) (RESPONDENT) ITA NO S . 758 & 759/LKW/2011 ASSESSMENT YEAR S : 2006 - 07 AND 2008 - 09 ASSTT. COMMISSIONER OF INCOME - TAX RANGE II LUCKNOW V. M/S SHIRKAR HOTEL PVT. LTD. 6, SHAHNAJAF ROAD LUCKNOW PAN: AAFCS4475D (APP ELL ANT) (RESPONDENT) ITA NO. 414/LKW/2013 ASSESSMENT YEAR: 2009 - 10 JOINT COMMISSIONER OF INCOME - TAX RANGE VI LUCKNOW V. M/S SHIRKAR HOTEL PVT. LTD. 6, SHAHNAJAF ROAD LUCKNOW PAN: AAFCS4475D (APP ELL ANT) (RESPONDENT) ASSESSEE BY : SHRI. A. K. GUPTA, C.A. DEPARTMENT BY: SHRI. ALOK MITRA, D.R. DATE OF HEARING: 12 05 2014 DATE OF PRONOUNCEMENT: 16 05 2014 PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 2 - : O R D E R PER SUNIL KUMAR YADAV: THESE CROSS - APPEALS ARE PREFERRED BY THE ASSESSEE AS WELL AS THE REVENUE AGAINST THE RES PECTIVE ORDERS OF THE LD. CIT(A) FOR ASSESSMENT YEARS 2006 - 07, 2008 - 09 AND 2009 - 10. SINCE COMMON ISSUE I S INVOLVED IN THESE APPEALS, THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF THROUGH THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2 . THESE APP EALS WERE LISTED FOR HEARING ON 12.5.2014 AND THE ASSESSEE HAS MOVED AN APPLICATION FOR ADJOURNMENT ON THE GROUND THAT THE ASSESSEE HAS APPLIED FOR APPROVAL UNDER SECTION 80IB(7)(A) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT') FROM T HE D GIT ( EXEMPTION ), NEW DELHI AND THE REQUEST OF THE ASSESSEE IS PENDING WITH HIM AND T HE ASSESSEE IS VERY HOPEFUL OF GETTING THE APPROVAL FROM THE COMPETENT AUTHORITY. THEREFORE, THE MATTER MAY BE ADJOURNED TILL APPROVAL IS OBTAINED FROM THE COMPETENT A UTHORITY. IN SUPPORT OF HIS CONTENTION, THE LD. COUNSEL FOR THE ASSESSEE HAS PLACED RELIANCE UPON THE CORRESPONDENCE EXCHANGED WITH THE INCOME - TAX DEPARTMENT IN THIS REGARD . 3 . THE LD. D.R. STRONGLY OPPOSED THE ADJOURNMENT WITH THE SUBMISSION THAT THE ASSESS EE HAS BEEN GRANTED APPROVAL UNDER SECTION 80IB(7)(B) OF THE ACT VIDE LETTER DATED 11.11.2002, THEREFORE, APPROVAL UNDER SECTION 80IB(7)(A) OF THE ACT CANNOT BE GRANTED TO IT. MOREOVER, THE LAST CORRESPONDENCE EXCHANGED BY THE ASSESSEE WITH THE DEPARTMENT WAS IN THE YEAR 2011 AND NO COMMUNICATION AFTER 2011 IS PLACED ON RECORD IN SUPPORT OF HIS CONTENTION THAT THE REQUEST OF THE ASSESSEE FOR APPROVAL UNDER SECTION 80IB(7)(A) OF THE ACT IS SUB JUDICE WITH THE COMPETENT AUTHORITY. THE LD. D.R. HAS ALSO PLAC ED RELIANCE UPON THE ORDER OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2007 - 08 WITH THE SUBMISSION THAT A SIMILAR ISSUE WAS RAISED BEFORE THE TRIBUNAL AND THE TRIBUNAL HAS GIVEN A CATEGORICAL FINDING THAT THE APPROVAL FOR EXEMPTION PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 3 - : UNDER SECTION 80IB (7)(A) OR 80IB(7)(B) OF THE ACT IS BEING GRANTED ON THE BASIS OF THE LOCATION OF THE HOTEL. THE TRIBUNAL HAS TAKEN COGNIZANCE OF THE FACT THAT THE APPROVAL FOR EXEMPTION UNDER SECTION 80IB(7)(A) OF THE ACT WAS NOT GRANTED TO THE ASSESSEE BY THE COMPETENT AUTHORITY AND THE TRIBUNAL RESTORED THE MATTER TO THE ASSESSING OFFICER FOR ALLOWING EXEMPTION UNDER SECTION 80 - IB(7)(B) OF THE ACT. THEREFORE, THE ISSUE IS COVERED BY THE ORDER OF THE TRIBUNAL DATED 13.12.2012 IN ITA NO.360/LKW/2011 FOR ASS ESSMENT YEAR 2007 - 08 AND THERE IS NO JUSTIFICATION IN KEEPING THE APPEALS PENDING BEFORE THE TRIBUNAL TILL THE ASSESSEE RECEIVES APPROVAL UNDER SECTION 80IB(7)(A) OF THE ACT. 4 . HAVING GONE THROUGH THE ORDER OF THE TRIBUNAL FOR ASSESSMENT YEAR 2007 - 08 AND THE OTHER CORRESPONDENCE EXCHANGED BETWEEN THE ASSESSEE AND THE DEPARTMENT, WE FIND THAT THE LAST CORRESPONDENCE EXCHANGED WITH THE DEPARTMENT WAS ON 5.4.2011. THEREAFTER THERE IS NO COMMUNICATION IN THIS REGARD. THEREFORE, NOTHING IS AVAILABLE ON RECORD TO DEMONSTRATE THE THERE IS ANY LIKELIHOOD OF GETTING APPROVAL FROM THE COMPETENT AUTHORITY FOR EXEMPTION UNDER SECTION 80IB(7)(A) OF THE ACT. WE, HOWEVER, HAVE CAREFULLY EXAMINED THE ORDER OF THE TRIBUNAL FOR ASSESSMENT YEAR 2007 - 08 IN THE ASSESSEES OWN C ASE AND WE FIND THAT IN THAT YEAR ALSO THE ASSESSEE RAISED A CLAIM UNDER SECTION 80IB(7)(A) OF THE ACT BUT IT WAS DISALLOWED BY THE ASSESSING OFFICER IN THE ABSENCE OF PROPER APPROVAL FOR GRANTING EXEMPTION UNDER SECTION 80IB(7)(A) OF THE ACT BY THE COMPET ENT AUTHORITY. BUT THE TRIBUNAL HAS TAKEN NOTE OF THE APPROVAL GRANTED BY THE COMPETENT AUTHORITY FOR DEDUCTION UNDER SECTION 80IB(7)(B) OF THE ACT AND THE TRIBUNAL ACCORDINGLY DIRECTED THE ASSESSING OFFICER TO RE - EXAMINE THE CLAIM OF THE ASSESSEE FOR DED UCTION UNDER SECTION 80IB(7)(B) OF THE ACT. THEREFORE, WE FIND NO JUSTIFICATION IN KEEPING THE APPEALS PENDING WITH THE TRIBUNAL. WE ACCORDINGLY REJECT THE REQUEST FOR ADJOURNMENT OF THE HEARING AND THE APPEALS WERE HEARD . 5 . THE LD. COUNSEL FOR THE ASSESSE E HAS ALSO MOVED A REVISED GROUNDS OF APPEAL IN ITA NO.744/LKW/2011 WITH THE SUBMISSION THAT THERE PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 4 - : WAS A CLERICAL MISTAKE IN QUANTUM OF DEDUCTION CLAIMED UNDER SECTION 80IB(7)(A) OF THE ACT. THEREFORE, THE REVISED GROUNDS MAY BE TAKEN ON RECORD IN PLACE O F ORIGINAL GROUNDS OF APPEAL. SINCE THE CORRECTION IN THE QUANTUM OF DEDUCTION IS MADE, WE TAKE THE REVISED GROUNDS ON RECORD IN PLACE OF ORIGINAL GROUNDS. ACCORDINGLY QUANTUM OF DEDUCTION OF RS.63,38,930/ - IS SUBSTITUTED IN PLACE OF RS.5,77,79,081/ - . 6 . NO W WE GO ON MERIT OF THE CASE. THE FACTS IN BRIEF CULLED OUT FROM THE ORDERS OF THE AUTHORITIES BELOW ARE THAT THE ASSESSEE HAS RAISED A CLAIM OF DEDUCTION UNDER SECTION 80IB(7)(A) OF THE ACT IN ITS RETURN OF INCOME , WHICH WAS DISALLOWED BY THE ASSESSING O FFICER ON THE GROUND THAT THE ASSESSEE DID NOT POSSESS APPROVAL FOR DEDUCTION UNDER SECTION 80IB(7)(A) OF THE ACT FROM THE COMPETENT AUTHORITY. 7 . AGAINST THE DISALLOWANCE, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) AND REITERATED ITS CLAIM FOR DE DUCTION UNDER SECTION 80IB(7)(A) OF THE ACT. BEFORE THE LD. CIT(A), THE ASSESSEE HAS ALSO RAISED AN ALTERNATIVE CLAIM FOR DEDUCTION UNDER SECTION 80IB(7)(B) OF THE ACT AND PLACED THE COPY OF APPROVAL FROM THE COMPETENT AUTHORITY FOR DEDUCTION UNDER SECTIO N 80IB(7)(B) OF THE ACT. THE LD. CIT(A) TOOK COGNIZANCE OF THESE FACTS AND ALLOWED DEDUCTION UNDER SECTION 80IB(7)(B) OF THE ACT IN THE LIGHT OF THE APPROVAL FOR DEDUCTION UNDER SECTION 80IB(7)(B) OF THE ACT GRANTED TO THE ASSESSEE BY THE COMPETENT AUTHOR ITY . BUT , SO FAR AS DEDUCTION UNDER SECTION 80IB(7)(A) OF THE ACT IS CONCERNED, THE LD. CIT(A) WAS OF THE VIEW THAT THIS CLAIM CANNOT BE GRANTED TO THE ASSESSEE, AS THE ASSESSEE DID NOT POSSESS APPROVAL FOR GRANT OF DEDUCTION UNDER SECTION 80IB(7)(A) OF T HE ACT FROM THE COMPETENT AUTHORITY. 8 . THE ORDER OF THE LD. CIT(A) FOR GRANT OF DEDUCTION UNDER SECTION 80IB(7)(B) OF THE ACT IS CHALLENGED BY THE REVENUE THROUGH THEIR APPEALS IN ITA NOS.758 & 759/LKW/2011 AND 414/LKW/2013; WHEREAS DENIAL OF DEDUCTION UND ER SECTION 80IB(7)(A) OF THE ACT IS CHALLENGED BY THE ASSESSEE THROUGH THEIR APPEALS IN ITA NOS.744 & 745/LKW/2011 AND 334/LKW/2013. PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 5 - : 9 . IN THE ASSESSEES APPEALS, THE ASSESSEE COULD NOT PLACE APPROVAL FROM THE COMPETENT AUTHORITY FOR GRANT OF DEDUCTION UNDER SECTION 80IB(7)(A) OF THE ACT AND WITHOUT WHICH DEDUCTION UNDER SECTION 80IB(7)(A) OF THE ACT CANNOT BE ALLOWED TO THE ASSESSEE. MOREOVER, THE ENTIRE ISSUE WAS ALSO EXAMINED BY THE TRIBUNAL VIDE ITS ORDER DATED 13.12.2011 AND THE TRIBUNAL HAS HELD THAT DE DUCTION UNDER SECTION 80IB(7)(A) OF THE ACT CANNOT BE GRANTED IN THE ABSENCE OF APPROVAL FROM THE COMPETENT AUTHORITY. BUT SO FAR AS DEDUCTION UNDER SECTION 80IB(7)(B) OF THE ACT IS CONCERNED, THE TRIBUNAL WAS OF THE VIEW THAT IT CAN BE ALLOWED TO THE ASS ESSEE, AS THE ASSESSEE POSSESS APPROVAL FROM THE COMPETENT AUTHORITY. BUT FOR NECESSARY VERIFICATION, THE MATTER WAS RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER. THE RELEVANT OBSERVATIONS OF THE TRIBUNAL IN THIS REGARD ARE EXTRACTED HEREUNDER: - 17. HAVING HEARD THE RIVAL SUBMISSIONS AND FROM A CAREFUL PERUSAL OF THE ORDERS OF THE AUTHORITIES BELOW AND THE MATERIALS AVAILABLE ON RECORD, WE FIND THAT UNDISPUTEDLY THE ASSESSEE HAS RAISED A CLAIM FOR DEDUCTION UNDER SECTION 80IB(7)(A) OF THE ACT AND THIS CLAIM WAS DENIED FOR THE REASON THAT THE ASSESSEE COULD NOT FURNISH APPROVAL FROM THE PRESCRIBED AUTHORITY. THOUGH THE ASSESSEE HAS FILED VARIOUS DOCUMENTARY EVIDENCE WITH REGARD TO THE RECOMMENDATION BY THE DIRECTOR GENERAL OF INCOME TAX (EXEMPTION) FOR GRANT OF APPROVAL FOR EXEMPTION UNDER SECTION 80IB(7)(A) OF THE ACT TO THE ASSTT. DIRECTOR GENERAL (H&R), YET IN FACT THE APPROVAL HAS NOT BEEN GRANTED EVEN TILL DATE. THEREFORE, PRIMA FACIE THE ASSESSEE COULD NOT FULFILL THE REQUISITE CONDITIONS FOR CLAIMING DEDUCTION UNDER SECTION 80IB(7)(A) OF THE ACT. 18 . SO FAR AS THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 80IB(7)(B) OF THE ACT IS CONCERNED, WE FIND THAT THOUGH THE ASSESSEE HAS FILED A CERTIFICATE OF APPROVAL OF THE DIRECTOR GENERAL OF TOU RISM BEFORE THE ASSESSING OFFICER FOR EXEMPTION UNDER SECTION 80IB(7)(B) OF THE ACT, BUT THE ASSESSEE DID NOT RAISE ANY CLAIM UNDER THIS PROVISION. IT HAS BEEN HELD BY THE VARIOUS HIGH COURTS AND ALSO THE APEX COURT THAT THE DUTY CAST ON THE INCOME TAX OF FICER TO DETERMINE THE INCOME OF THE ASSESSEE AS PER THE PROVISIONS OF LAW. SINCE THE APPROVAL OF THE PRESCRIBED AUTHORITY IS ON RECORD BEFORE THE ASSESSING OFFICER, HE SHOULD HAVE EXAMINED THE CLAIM OF DEDUCTION UNDER SECTION 80IB(7)(B) OF THE ACT IN THE LIGHT OF RELEVANT EVIDENCE, BUT HE DID NOT DO SO. 19 . WE HAVE ALSO CAREFULLY EXAMINED THE PROVISIONS OF SECTIONS 80IB(7)(A) AND 80IB(7)(B) OF THE ACT AND WE FIND THAT THE PERCENTAGE PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 6 - : OF DEDUCTION ALLOWABLE DEPENDS UPON THE LOCATION OF THE HOTEL. IF THE HOTEL IS LOCATED IN A HILLY AREA OR A RURAL AREA OR A PLACE OF PILGRIMAGE OR SUCH OTHER PLACE AS THE CENTRAL GOVERNMENT MAY, HAVING REGARD TO THE NEED FOR DEVELOPMENT OF INFRASTRUCTURE FOR TOURISM IN ANY PLACE AND OTHER RELEVANT CONSIDERATIONS, SPECIFY BY NOTIFI CATION IN THE OFFICIAL GAZETTE AND SUCH HOTEL STARTS FUNCTIONING AT ANY TIME DURING THE PERIOD BEGINNING ON THE 1 ST DAY OF APRIL, 1990 AND ENDING ON THE 31 ST DAY OF MARCH, 1994 OR BEGINNING ON THE 1 ST DAY OF APRIL, 1997 AND ENDING ON THE 31 ST DAY OF MARCH , 2001, IT WOULD BE ENTITLED FOR DEDUCTION @ 50% OF THE PROFIT AND GAINS DERIVED FROM BUSINESS OF SUCH HOTEL FOR A PERIOD OF 10 CONSECUTIVE YEARS BEGINNING FROM THE INITIAL ASSESSMENT YEAR SUBJECT TO FULFILLMENT OF CERTAIN CONDITIONS. THE OTHER HOTELS WHI CH ARE LOCATED IN ANY OTHER PLACE OTHER THAN THOSE MENTIONED IN CLAUSE (A) OF SUB - SECTION (7) OF SECTION 80IB OF THE ACT AND STARTED ITS FUNCTIONING DURING THE PERIOD BEGINNING ON THE 1 ST DAY OF APRIL, 1991 AND ENDING ON THE 31 ST DAY OF MARCH, 1995 OR BEG INNING ON THE 1 ST DAY OF APRIL, 1997 AND ENDING ON THE 31 ST DAY OF MARCH, 2001, IT WOULD BE ENTITLED FOR DEDUCTION @ 30% OF THE PROFIT AND GAINS DERIVED FROM THE BUSINESS OF SUCH HOTEL FOR 10 CONSECUTIVE YEARS BEGINNING FROM THE INITIAL ASSESSMENT YEAR SUB JECT TO THE APPROVAL OF THE PRESCRIBED AUTHORITY. 20 . IN BOTH THE CASES THE PRESCRIBED AUTHORITIES ARE DIFFERENT. UNDER RULE 18BBC OF THE RULE, THE PRESCRIBED AUTHORITIES ARE DEFINED AND FOR CLAUSE (A) OF SUB - SECTION (7) OF SECTION 80IB OF THE ACT, THE PRESCR IBED AUTHORITY SHALL BE THE DIRECTOR GENERAL INCOME TAX (EXEMPTION) WHO SHALL GRANT APPROVAL ON THE CONCURRENCE OF THE DIRECTOR GENERAL IN THE DIRECTORATE GENERAL OF TOURISM, GOVERNMENT OF INDIA. WHEREAS FOR CLAUSE (B) OF SUB - SECTION (7) OF SECTION 80IB O F THE ACT, THE PRESCRIBED AUTHORITY SHALL BE THE DIRECTOR GENERAL IN THE DIRECTORATE GENERAL OF TOURISM, GOVERNMENT OF INDIA. THEREFORE, FOR GRANT OF APPROVAL FOR CLAUSE (B) OF SUB - SECTION (7) OF SECTION 80IB OF THE ACT, THERE WILL BE NO ROLE OF THE DIREC TOR GENERAL INCOME TAX (EXEMPTION). FOR THE SAKE OF REFERENCE, WE EXTRACT SUB - SECTION (7) OF SECTION 80IB OF THE ACT AS UNDER: - (7) THE AMOUNT OF DEDUCTION IN THE CASE OF ANY HOTEL SHALL BE (A) FIFTY PER CENT OF THE PROFITS AND GAINS DERIVED FROM THE BUSINESS OF SUCH HOTEL FOR A PERIOD OF TEN CONSECUTIVE YEARS BEGINNING FROM THE INITIAL ASSESSMENT YEAR AS IS LOCATED IN A HILLY AREA OR A RURAL AREA OR A PLACE OF PILGRIMAGE OR SUCH OTHER PLACE AS THE CENTRAL GOVERNMENT MAY, HAVING REGARD TO THE NEED FOR DEVELOPMENT OF INFRASTRUCTURE FOR TOURISM IN ANY PLACE AND OTHER RELEVANT CONSIDERATIONS, SPECIFY BY NOTIFICATION IN THE OFFICIAL GAZETTE AND SUCH HOTEL STARTS FUNCTIONING AT ANY TIME DURING THE PERIOD BEGINNING ON THE 1ST DAY OF APRIL, 1990 PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 7 - : AND ENDING ON THE 31ST DAY OF MARCH, 1994 OR BEGINNING ON THE 1ST DAY OF APRIL, 1997 AND ENDING ON THE 31ST DAY OF MARCH, 2001: PROVIDED THAT NOTHING CONTAINED IN THIS CLAUSE SHALL APPLY TO A HOTEL LOCATED AT A PLACE WITHIN THE MUNICIPAL JURISDICTION (WHETHER KNOWN AS A MUNICIPALITY, MUNICIPAL CORPORATION, NOTIFIED AREA COMMITTEE OR A CANTONMENT BOARD OR BY ANY OTHER NAME) OF CALCUTTA, CHENNAI, DELHI OR MUMBAI, WHICH HAS STARTED OR STARTS FUNCTIONING ON OR AFTER THE 1ST DAY OF APRIL, 1997 AND BEFORE THE 31ST DAY OF MARCH , 2001: PROVIDED FURTHER THAT THE SAID HOTEL IS APPROVED BY THE PRESCRIBED AUTHORITY FOR THE PURPOSE OF THIS CLAUSE IN ACCORDANCE WITH THE RULES MADE UNDER THIS ACT AND WHERE THE SAID HOTEL IS APPROVED BY THE PRESCRIBED AUTHORITY BEFORE THE 31ST DAY OF MAR CH, 1992, SHALL BE DEEMED TO HAVE BEEN APPROVED BY THE PRESCRIBED AUTHORITY FOR THE PURPOSE OF THIS SECTION IN RELATION TO THE ASSESSMENT YEAR COMMENCING ON THE 1ST DAY OF APRIL, 1991; (B) THIRTY PER CENT OF THE PROFITS AND GAINS DERIVED FROM THE BUSINESS OF SUCH HOTEL AS IS LOCATED IN ANY PLACE OTHER THAN THOSE MENTIONED IN SUB - CLAUSE (A) FOR A PERIOD OF TEN CONSECUTIVE YEARS BEGINNING FROM THE INITIAL ASSESSMENT YEAR IF SUCH HOTEL HAS STARTED OR STARTS FUNCTION ING AT ANY TIME DURING THE PERIOD BEGINNING ON THE 1ST DAY OF APRIL 1991 AND ENDING ON THE 31ST DAY OF MARCH, 1995 OR BEGINNING ON THE 1ST DAY OF APRIL, 1997 AND ENDING ON THE 31ST DAY OF MARCH, 2001: PROVIDED THAT NOTHING CONTAINED IN THIS CLAUSE SHALL APPLY TO A HOTEL LOCATED AT A PLACE WITHIN THE MUNICIPAL JURISDICTION (WHETHER KNOWN AS A MUNICIPALITY, MUNICIPAL CORPORATION, NOTIFIED AREA COMMITTEE; TOWN AREA COMMITTEE OR A CANTONMENT BOARD OR BY ANY OTHER NAME) OF CALCUTTA, CHENNAI, DELHI OR MUMBAI, WHICH HAS STARTED OR STARTS FUNCTIONING ON OR A FTER THE 1ST DAY OF APRIL, 1997 AND BEFORE THE 31ST DAY OF MARCH, 2001 21 . FROM THE BARE READING OF THE AFORESAID CLAUSES (A) AND (B) OF SUB - SECTION (7) OF SECTION 80IB, WE FIND THAT THE PERCENTAGE OF DEDUCTIONS IS DIFFERENT DEPENDING UPON THE AREA WHERE THE HOTEL IS SITUATED. THEREFORE, IT CANNOT BE SAID THAT IF DEDUCTION UNDER CLAUSE (A) IS NOT ALLOWED IT SHOULD BE ALLOWED UNDER CLAUSE (B). BOTH TYPES OF HOTELS ARE LOCATED IN DIFFERENT PLACES. THEREFORE, VERIFICATION IS REQUIRED BY THE AUTHORITIES CONCERN ED BEFORE ALLOWING ANY DEDUCTION. IN THE INSTANT CASE, APPROVAL UNDER SECTION 80IB(7)(B) HAS ALREADY BEEN OBTAINED BY THE ASSESSEE FROM THE DIRECTOR GENERAL OF TOURISM BUT THE PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 8 - : CLAIM UNDER THIS CLAUSE I.E. CLAUSE (B) HAS NOT BEEN ADJUDICATED UPON BY THE AS SESSING OFFICER. BUT THESE FACTS WERE NOT TAKEN IN ACCOUNT BY THE ASSESSING OFFICER AS WELL AS THE LD. CIT(A) WHILE DEALING WITH THE ISSUE. IT IS ALSO STRANGE TO NOTE THAT ONCE THE ASSESSEE HAS OBTAINED APPROVAL UNDER SECTION 80IB(7)(B) OF THE ACT, HOW I T BECOMES ELIGIBLE FOR DEDUCTION UNDER SECTION 80IB(7)(A) OF THE ACT BECAUSE THE PERCENTAGES OF DEDUCTIONS ARE DIFFERENT DEPENDING UPON THE LOCATION OF THE HOTELS. 22 . DURING THE COURSE OF HEARING OF THE APPEAL, OUR ATTENTION WAS ALSO INVITED TO THE ORDER OF T HE LD. CIT(A) IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2006 - 07 IN WHICH THE LD. CIT(A) HAS ALLOWED DEDUCTION UNDER SECTION 80IB(7)(B) OF THE ACT @ 30% OF THE TOTAL PROFIT AFTER HOLDING THAT IF DEDUCTION UNDER SECTION 80IB(7)(A) OF THE ACT IS NOT ALLOWABL E ATLEAST DEDUCTION UNDER SECTION 80IB(7)(B) OF THE ACT BE ALLOWED TO THE ASSESSEE AS THE ASSESSEE HAS GOT APPROVAL FROM THE PRESCRIBED AUTHORITY UNDER SECTION 80IB(7)(B) OF THE ACT. THE ORDER OF THE LD. CIT(A) FOR ASSESSMENT YEAR 2006 - 07 IS NOT BEFORE US , THEREFORE, WE REFRAIN OURSELVES FROM MAKING ANY COMMENTS THEREON. WE ARE, HOWEVER, OF THE VIEW THAT UNDER THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE, THIS ISSUE REQUIRES FRESH ADJUDICATION BY THE ASSESSING OFFICER IN THE LIGHT OF THE RELEVANT PROVISI ONS OF THE ACT AND ALSO THE APPROVAL OBTAINED BY THE ASSESSEE FROM THE DIRECTOR GENERAL OF TOURISM FOR DEDUCTION UNDER SECTION 80IB(7)(B) OF THE ACT. ACCORDINGLY, THE ORDER OF THE LD. CIT(A) IS SET ASIDE AND THE MATTER IS RESTORED TO THE FILE OF THE ASSES SING OFFICER WITH THE DIRECTION TO RE - ADJUDICATE THE ISSUE IN TERMS INDICATED ABOVE AFTER AFFORDING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 10 . IN THE INSTANT CASE, THE ASSESSING OFFICER HAS NOT ALLOWED DEDUCTION UNDER SECTION 80IB(7)(A) OF THE ACT IN TH E ABSENCE OF APPROVAL FROM THE COMPETENT AUTHORITY IN THIS REGARD. SO FAR AS DEDUCTION UNDER SECTION 80IB(7)(B) OF THE ACT IS CONCERNED, THE CLAIM WAS NOT RAISED BEFORE THE ASSESSING OFFICER, THEREFORE, HE HAD NO OCCASION TO ADJUDICATE THE SAME. BUT BEFO RE THE LD. CIT(A), THE ASSESSEE HAS RAISED AN ALTERNATIVE CLAIM FOR DEDUCTION UNDER SECTION 80IB(7)(B) OF THE ACT AND IN ORDER TO ESTABLISH ITS CLAIM, A COPY OF APPROVAL FROM THE COMPETENT AUTHORITY FOR DEDUCTION UNDER SECTION 80IB(7)(B) OF THE ACT WAS ALS O PLACED BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS CALLED FOR REMAND REPORT FROM THE ASSESSING OFFICER IN THIS REGARD AND HAVING EXAMINED THE CLAIM OF THE ASSESSEE UNDER SECTION 80IB(7)(B) OF THE ACT IN THE LIGHT OF APPROVAL AND THE ASSESSING PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 9 - : OFFICERS RE PORT, THE LD. CIT(A) HAS ALLOWED DEDUCTION UNDER SECTION 80IB(7)(B) OF THE ACT. THE LD. D.R. HAS RAISED AN OBJECTION FOR ADJUDICATION OF NEW CLAIM BEFORE THE LD. CIT(A) IN THE LIGHT OF THE JUDGMENT OF THE HON'BLE APEX COURT IN THE CASE OF GOETZE (INDIA) L TD. V. CIT [2006] 284 ITR 323 (SC), BUT THESE ARGUMENTS WERE ALSO EXAMINED BY THE TRIBUNAL IN ITS AFORESAID ORDER. THEREFORE, THE IMPUGNED ISSUE IS ALMOST COVERED BY THE AFORESAID ORDER OF THE TRIBUNAL AND WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT( A), AS HE HAS ALLOWED EXEMPTION UNDER SECTION 80IB(7)(B) OF THE ACT AFTER OBTAINING REMAND REPORT AND IN THE LIGHT OF APPROVAL FOR EXEMPTION GRANTED BY THE COMPETENT AUTHORITY. SINCE THE FINDINGS OF THE LD. CIT(A) ARE IN CONSONANCE WITH THE OBSERVATIONS O F THE TRIBUNAL, WE FIND NO INFIRMITY THEREIN. ACCORDINGLY, WE CONFIRM THE SAME. 11 . IN THE RESULT, APPEALS OF THE ASSESSEE AS WELL AS THE REVENUE STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16.5.2014. S D/ - S D/ - [ A. K. GARODIA ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 16 TH MAY , 2014 JJ: 1205 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ )