2019 (10) TMI 472

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.... 2.01. The assessee is engaged in the business of builder and operating hotel of Two Star and above category as classified by the Central government of India. 2.02. According to the assessee, capital expenditure incurred wholly and exclusively for the purpose of any specified business carried out by him during the previous year shall not include expenditure on land, goodwill and financial instruments incurred by the assessee as he has claimed exemption u/s.10AA of the Act and he also claimed deduction u/s.35AD of the Act as he has obtained license from the competent authority. 2.03. That the A.O. made disallowance of claim of deduction u/s. 35AD of the Act of Rs. 6,26,94,610/- on account of failure on the part of assessee to furnish an....

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....auna Bhatt, learned counsel has contended that the assessee has failed to produce any evidence to establish that there was separate approval and is granted under section 35AD(5)(aa) of the Act. It is contended that the order of the tribunal is erroneous. The tribunal has failed to take into account the fact that the assessee could not furnish the Certificate having been prescribed by law. It is contended that the order of the tribunal is otherwise perverse and therefore, requires to be quashed and set aside. 5.00. Mr.B.S. Soparkar, learned advocate appearing on behalf of the assessee has contended that the order passed by the tribunal is just, legal and as per the evidence. 5.01. Mr.Soparkar has also drawn attention of this Court to the....

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....o fulfill the conditions being expenditure incurred prior to commencement of its operation and the amount is capitalize in the books of accounts of the assessee on the operation. As per the provisions of section, any capital expenditure incurred by the assessee prior to commencement of operation of the new unit shall be allowed as deduction in the previous year in which the assessee commences the operation of hotel business. Sec.35AD(5)(aa) is regarding deduction in respect of expenditure on specified business:- "on or after 1st day of April, 2010, where the specified business is in the nature of building and operating a new hotel of Two Star or above category as classified by the Central Government." In respect of its contention assesse....

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....es operations and in the case of business like that of the assessee, on or after April 1, 2010 where specified business is in the nature of building and operating new hotel of Two Star or above category as classified by the Central government. We find nowhere in clause (aa) to sub-section (5) of section 35AD of the Act mandating that the date of certificate should be with effect from a particular date. Therefore, the provision which is obviously to encourage establishment of hotels of a particular category, should be read as a beneficial provision and therefore, the interpretation given by the Tribunal considering the facts of the case is perfectly valid and justified. For the above reasons, we find no grounds to interfere with the order pa....