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of <h1>Investment Allowance u/s 32A Not Applicable to Hotels, Including Restaurants, Says Tax Board.</h1> The circular addresses whether investment allowance under section 32A of the Income-tax Act, 1961, applies to new machinery and plant installed in hotels. The Board, after consulting the Ministry of Law, concludes that hotels, including their restaurant units, do not qualify as industrial undertakings and thus are not eligible for the allowance. This decision aligns with the Kerala High Court's ruling in CIT vs. Casino Pvt. Ltd., which classified hotels as trading concerns rather than industrial companies. Consequently, claims for investment allowance by hotels should be disallowed in current and future assessments, with remedial actions taken for past assessments where applicable.
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