The Income Tax Tribunal, Chandigarh, in The A.C.I.T., Vs. Sh. Raghunath Singh Thakur, ITA No.152 by a judgment dated 22.06.2012 held that deduction under section 80IC can be allowed to hotels belonging to the category of eco -tourism.
It was an appeal by the Revenue against the order of CIT (Appeals), Shimla, dated 30.11.2009, passed under section 143(3) of the Income Tax Act, 1961.
Grounds of appeal:
The Revenue raised the issue that the CIT(A) is wrong in holding that the profits derived from the hotel run by the assessee are eligible for deduction under section 80IC amounting to Rs. 52,12,304/-. The ld. CIT (A) held that the hotel which is run by the assessee is an eco- tourism project, as such falls under item 15 of Schedule XIV of the Income Tax Act, 1961. The Revenue was of the view that eco tourism is a broader concept unlike that of other traditional tourism, and the hotel, though located in a market place is a part of an eco-tourism project.
The Revenue stated that the CIT (A) is wrong in holding that the hotel which is run by the assessee is an eco-tourism project just based on the assessee’s contention that it obeys eco-friendly norms. According to the opinion of the Revenue, the CIT (A) is wrong in holding that the no objection certificate from the State Government is a document which is sufficient to corroborate the contention of the assessee though the certificate does not categorically state that the hotel is part on an eco-tourism project. The Revenue argued that that the assessee hotel is not eligible for any deduction under section 80IC. The findings of the CIT (A) are arbitrary and erroneous, as claimed by the Revenue in the said appeal.
The Revenue prayed that the order of the ld. CIT(A) suffers from many irregularities, as such should be set aside and the order of the Assessing Officer should be restored. The assessee in its reply before the Hon’ble Court stated that substantial expansion of the purview of section 80IC should be made.
Brief facts of the case:
The brief facts of the case are that the assessee used to carry on the business of hotel in Shimla, Himachal Pradesh. The assessee earned a profit of Rs.52, 12,304/- from its said business against which it claimed a deduction under section 80IC. The deduction claimed under section 80IC was denied to the assessee by the Assessing Officer. But the CIT (A) held that the appellant was entitled to deduction under section 80IC of the I. T. Act, 1961.
Three appeals in connection with the same assessee having identical issues were heard together and were disposed of by an order for convenience. The appeal of the Revenue was dismissed by the Hon’ble High Court.