TaxTMI 
TaxTMI 
2012 (10) TMI 639
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.... each appeal, the real grievance is projected in ground no. 1 that the ld. CIT(Appeals) grossly erred on facts and in law in upholding the disallowance of the claim of deduction u/s 80-IC of the Income-tax Act, 1961 ('the Act' for short) on misconstruction of statutory provisions contained in the Act. 1.2 The appeal for assessment year 2007-08 is late by seven days. In this connection, the assessee has filed a letter dated 26.09.2011 and an affidavit from Shri Chandra Shekhar, C.A., sworn on 24.09.2011. It is deposed that the assessee-company received the appellate order on 19.05.2011 and, therefore, the appeal had to be filed on or before 19.07.2011. The assessee signed the appeal documents on 15.07.2011 and sent them to his office. The....
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....ntly, the return was taken up for scrutiny by issuing notice u/s 143(2) on 23.01.2006. It was found that the assessee has been engaged in the business of a hotel. In the year under consideration, the assessee made additions to plant and machinery of the value of Rs. 20,71,243/-. It also purchased a generator of the value of Rs. 7,61,618/-. The book value of the plant and machinery as on 01.04.2004 amounted to Rs. 77,158/-. Clause (ix) of sub-section (8) of section 80IC defines the expression "substantial expansion" to mean increase in investment in plant and machinery by at least 50% of the book value of plant and machinery (before taking depreciation in any year), as on the first day of the previous year in which substantial expansion is u....
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....d any measure which would reduce the adverse impact on environment. However, it is evident from the Inspector's report that the appellant has not fulfilled the criteria of indulging in any activity of eco-tourism. The hotel has used generator which spoils the environment by way of quite emission of green house gases. The hotel has not adopted any measure for conservation of energy sources. It has not utilized any known fundamental sources of energy like solar energy to meet the needs of running the hotel activity. The rain harvesting has not been adopted to conserve the water resources. The hotel has not adopted any system of segregation of waste in bio-degradable and non-biodegradable categories and then recycle such waste. Even though ....
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....said interpretation of the word "hotel' succeeding 'eco-tourism' in clause 15 of Part-C of Schedule XIV, I am of the considered opinion that the action of the AO is quite right in rejecting the claim of deduction of appellant u/s 80IC of the I.T. Act, 1961 and accordingly the assessment made by the Assessing Officer by rejecting such claim u/s 80IC of I.T. Act is hereby upheld." 3.2 The first question, which came up for discussion before us is whether, the deduction in respect of an existing hotel is available if substantial expansion thereof takes place within the dates prescribed in the statute? The case of the ld. counsel is that the deduction is admissible if - (a) the undertaking commences any operation specified in Fourteenth Sc....
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....dmissible only if commencement of operation and substantial expansion takes place within the statutory period. The deduction where the hotel commences any operation within the statutory period is admissible in any case on the basis of the language in the earlier part, therefore, the second part can only be a case where substantial expansion takes place during the statutory period. Accordingly, it is held that the condition mentioned in the aforesaid provision stands satisfied in this case. 4.1 The second question is-whether the deduction is available in case of a hotel which does not take steps towards ecological balance? The issue stands covered by the decision of "A" Bench of Delhi Tribunal in the case of Shri Bidhi Chand Singhal Vs....
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....ndertakes substantial expansion during the period beginning- (i)....... (ii) on the 7th day of January, 2003 and ending before the 1st day of April, 2012 in the State of Himachal Pradesh or the State of Uttaranchal; or (iii)......." Item no. 15 of Part C of the Fourteenth Schedule reads as under:- "15. Eco-tourism including hotels, resorts, spa, entertainment/amusement parks and ropeways." 6. From the above section and item no. 15 of Part-C of the Fourteenth Schedule, it can be observed that what is eligible for deduction is eco-tourism which include inter-alia hotels. It has been the contention of the assessee that his hotel is approved by the Government. The hotel cannot be approved by the Government without obtai....