IN INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC 1 NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .No.-568/Del/2016 (ASSESSMENT YEAR-2010-11) Chottey Lal Gupta ITO C/o. Hemant Arora & Co. LLP. CAs. Ward-1 354B, 30 Civil Lines, Roorkee vs Roorkee PAN-ACFPG2028P (APPELLANT) (RESPONDENT) Appellant by Sh. Hemant Kumar Arora, CA Respondent by Sh. Amrit Lal, Sr. DR Date of Hearing 31.08.2016 Date of Pronouncement 05.10.2016 ORDER PER DIVA SINGH, JM present appeal has been filed by assessee assailing correctness of order dated 24/11/2015 on following grounds :- 1. That in facts and circumstances of case and in law impugned order passed u/s 250(6) of Income Tax Act, 1961 by Ld.CIT(A) , Dehradun is based on conjectures, surmises, assuming incorrect facts and incorrect application of Law. 2. That Ld.CIT(A) has erred for not considering restaurant as part and parcel of hotel and considering it as distinct entity from hotel and for this reason not eligible to claim deduction u/s 80IC on account of fact that it does not fall under NIC classification 545101, to which exemption has been provided. 3. That appellant had claimed deduction u/s 80IC on Hotel Prem Dynasty since Assessment Year 2005-06, on Hotel Dynasty since Assessment Year 2006-07 and where as Hotel Premash since Assessment Year 2008-09. Since very beginning cases have been completed under scrutiny and deduction u/s 80IC has been claimed and accepted by department on all three hotels. But in Assessment Year 2009-10, on instruction of higher authorities deduction was denied by A.O., further on appeal to hon ble Income Tax Appellate Tribunal same was fully allowed vide Appeal order for Assessment Year 2009-10 dated 11/11/2015. 2 ITA No. 568/Del/2016 4. That on facts of case and in law Ld.CIT(A) has erred by not considering claim of 80IC for Rs.9,09,587/- in respect of Hotel Dynasty. 5. There is no basis to deny Appellant benefit of deduction u/s 80IC, Appellant having duly satisfied threshold conditions for availing said deduction. 6. That appellant craves for right to amend/modify/drop or add to above grounds of appeal. 7. above grounds of appeal are independent of each other. 2. Ld. AR invited attention to ground filed stated that Ground Nos. 1, 2, 6 & 7 are general in nature. Attention was invited to copy of order of ITAT dated 11th December 2015 filed in Court submitted that issue is covered in favour of assessee by virtue of said order dated 11/12/2015 in ITA No. 1285/Del/2013 pertaining to Assessment Year 2009- 10 in case of assessee itself. 2.1. Inviting attention to assessment order, it was submitted that assessee is proprietor of following 2 Hotels and Restaurant:- (i). Prem Dynasty Hotel Rs. 6,99,681/- (ii). Dynasty Restaurant Rs. 9,09,588/- (iii). Hotel Premansh Hotel Rs.4,04,370/- 2.2. claim put forth by assessee u/s 80IC in respect of these was as under:- Sl No. Name Income Year of initial Claim u/s 80IC claim 1. Prem Dynasty Rs.4,04,370/- 2005-06 Rs.1,01,093/- 2. Dynasty Rs.9,09,588/- 2006-07 Rs.9,09,588/- 3. Hotel Premansh Rs.6,99,681/- 2008-09 Rs. 6,99,681/- 3. Assessing Officer in course of scrutiny proceedings rejected claim of deduction for Restaurant Dynasty and also rejected claim for deduction u/s 80IC in respect of Hotel Premansh and Hotel Prem Dynasty for reasons set out in paras 7 to 7.4 and 8 to 8.16 respectively. Addressing same it was submitted that while so concluding Assessing Officer in Para 10 records fact that relief granted by CIT(A) in 2009-10 assessment year has not been accepted by Revenue and said order is under challenged before ITAT in appeal. Accordingly, it was submitted in 3 ITA No. 568/Del/2016 order to keep issue alive disallowance was made. said view it was submitted was confirmed by CIT(A). In said background, Ld. AR inviting attention to order of ITAT in immediately preceding assessment year submitted that relief granted by CIT(A) in earlier year has been upheld by ITAT. Accordingly, it was his submission that in year under consideration view taken may be followed. 3.1. Ld. Sr. DR ongoing through order of ITAT and facts available on record submitted that issue appears to be covered. However, time was given to Ld. Sr. DR and pass over was given allowing him time to consider orders and in case of any hesitance or doubt, it was pointed out he could seek time. 3.2. Thereafter, in pass over facts were again elaborated in greater detail. Considering record and submissions, Ld. Sr. DR submitted that point at issue is identical. 4. Having heard submissions and considering material available on record in light of submissions of parties before Bench, I find that in absence of any contrary argument on fact or law order of Co-ordinate Bench on identical facts and circumstances needs to be followed. Respectfully following judicial precedent as available in ITA No. 1281/Del/2013 dated 11.12.2015, impugned order is set aside and appeal of assessee is allowed. relevant extract for order followed reproduced hereunder for ready reference:- 8. We have heard both parties and perused material on record. WE taken note of fact that assessee had three hotels in State of Uttarakhand, namely, Hotel Prem Dynasty, Hotel Dynasty and Hotel Premansh. We find that assessee has claimed deduction u/s 80IC in respect of Hotel Prem Dynasty from 2005-06, Hotel Dynasty from 2006-07 and Hotel Premansh from 2008-09 and 80IC deduction was granted by A.O from Assessment Year 2005-06 which was completed u/s 143(3) assessment and in subsequent Assessment Year 2009-10 also, A.O has allowed deduction under scrutiny assessment. WE find force in arguments of Ld. AR that as per rule of consistency, since facts permeating in earlier years have not changed A.O ought not to have changed consistent stand of 4 ITA No. 568/Del/2016 Revenue. Be that as it may be let us examine whether A.O s action is as pr law when he disallowed claim u/s 80IC of Act. 8.1. In respect to claim of assessee s hotels that it is eligible for 80IC deduction, we find force in contention of ld. AR that this issue is no longer res integra. contention of AO that NOC from Pollution Control Board is requirement for satisfying eco- tourism which is condition precedent for being eligible for 80IC deduction has been considered by Coordinate Bench of this Tribunal in Shri Bidhi Chand Singhal vs.ITO, Rudrapur in ITA No.3419/Del/2009 for assessment year 2006-07 dated 04.11.2010 and Tribunal has held as under :- 5. We have heard both parties, gone through assessment order and order of CIT(A) and relevant provisions which have been referred by AO and CIT(A). provisions as contained in Section 80IC and as relevant to case of assessee are as under:- 80-IC. (1) Where gross total income of assessee includes any profits and gains derived by undertaking or enterprise from any business referred to in sub-section (2), there shall, in accordance with and subject to provisions of this section, be allowed, in computing total income of assessee, deduction from such profits and gains, as specified in sub-section (3). (2) This section applies to any undertaking or enterprise,- (a) ............ (b) which has begun or begins to manufacture or produce any article or thing, specified in Fourteenth Schedule or commences any operation specified in that Schedule, or which manufactures or produces any article or thing, specified in Fourteenth Schedule or commences any operation specified in that Schedule and undertakes substantial expansion during period beginning- (i) .................. (ii) on 7th day of January, 2003 and ending before 1st day of April, 2012, in State of Himachal Pradesh or State of Uttaranchal; or (iii) .................. Item No.15 of Part C of Fourteenth Schedule reads as under:- 15. Eco-tourism including hotels, resorts, spa, entertainment/amusement parks and ropeways. 6. From above Section and Item No.15 of Part C of Fourteenth Schedule, it can be observed that what is eligible for deduction is ecotourism which include inter alia hotels. It has been contention of assessee that his hotel is 5 ITA No. 568/Del/2016 approved by Government. hotel cannot be approved by Government without obtaining No Objection from Pollution Department. There is no material on record to show that Pollution Department of Government has not given No Objection to assessee. If it is so, then, it cannot be said that assessee is running hotel which is outside norms prescribed by Pollution Department. If plain reading is given to Item No.15 reproduced above, then, ecotourism inter alia include hotels. No material has been brought on record to show that eco-tourism status has been granted to any other hotel and which status assessee does not have. If logic applied by Assessing Officer and CIT (A) is made applicable, then, hotels which are not having alleged eco-tourism status cannot be held to be entitled to deduction u/s 80-IC. If none of hotels can be granted deduction u/s 80- IC, then, Item No.15 of Part C of Fourteenth Schedule will be redundant. Therefore, in our opinion, in absence of definition of ecotourism hotel as added into Item No.15 of Part C is to be construed to be hotel situated in State of Himachal Pradesh or State of Uttaranchal having valid licence on basis of No Objection from Pollution Department which can be treated to be hotel eligible for deduction u/s 80IC as per provisions of Section 80IC. Therefore, we allow claim of deduction u/s 80-IC to assessee and appeal of assessee is allowed. Therefore, in our opinion, assessee falls in ken of eco-tourism which qualifies for deduction u/s 80IC of Act and, therefore, we do not find any infirmity in order of ld. CIT (A) which warrants any interference on our part. Accordingly, we do not find any merit in appeal of revenue and appeal stands dismissed. 5. Accordingly, relying upon judicial precedent in assessees own case on identical facts and circumstances, appeal of assessee is allowed for statistical purposes. said order was pronounced in presence of parties before Bench on date of hearing itself. 6. In result, appeal of assessee is allowed. order is pronounced in open court on 05th of October 2016. Sd/- (DIVA SINGH) JUDICIAL MEMBER R. Naheed Amit Kumar 6 ITA No. 568/Del/2016 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI Chottey Lal Gupta v. ITO, Ward-1, Roorkee