TaxTMI 
TaxTMI 
TaxTMI 
2023 (2) TMI 204
X X X X Extracts X X X X
X X X X Extracts X X X X
....erred in holding that the receipts of Rs. 1,74,00.000/- received on revenue sharing basis as business receipts. 2. On the facts and circumstances of the case the Ld.CIT(A) erred in allowing the deduction u/s 801D to the assessee deposit the fact that the assessee has sub-letted the Hotel property at Goa to M/s Highest Cruises and Entertainment Pvt. Ltd. who was actually running the Hotel business and the assessee has received rent in the form of revenue sharing. 3. On the facts and circumstance of the case the Ld.ClT(A) erred in not appreciating that the deduction u/s 801D is available to the assessee who is engaged in the business of hotel and the assessee is clearly not engaged in the business of the Hotel and even the main object cla....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... under section 80-ID of the Act. Vide letter dated 28.11.2017, the assessee submitted that it got approval for a three star hotel in Goa with effect from 21.09.2013. Therefore, it has claimed proportionate deduction under section 80-ID for the period from 21.09.2013 to 31.03.2014 amounting to Rs.44,54,647 as per auditor's report. Necessary documents regarding ownership of the hotel property were produced before the Ld. Assessing Officer ("AO"). 4. The submission of the assessee was not acceptable to the Ld. AO. He found that the assessee company had taken the hotel property on rent which was subletted to M/s. Highest Cruises & Entertainment Pvt. Ltd. and the assessee company received rental income only from subletting of its assets. He dis....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... On perusal of the Revenue sharing agreement, the AO observed that the assessee company is owner of only 1/8" share of the property on which the hotel was situated and the balance 7/8" share is taken by the assessee company on lease from other co-owners. He further opined that the assessee company has sub-let the hotel to M/s Highest Cruises & Entertainment Pvt. Ltd. and the Revenue Sharing Agreement was just a device to declare the sublet income assessable as "Income from Other Sources" as "Income from Business and Profession" so as to enable itself to claim deduction u/s 80ID(2) of the Act. Thus, the deduction claimed by the assessee company was disallowed by the AO and the receipts were assessed as Income from Other Sources. 6.1 The ap....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e two parties with a view to enhance the prospective business and common revenues - clause 8.1.2. * It has incurred expenses on consultants for promotion, horticulture, advertising and marketing for joint business. 6.3 The appellant as an organizer of business, has developed a full-fledged hotel with all amenities / facilities and has obtained a necessary permissions / licenses including accreditation from Govt, of India Ministry of Tourism in the name of its hotel Villa De-Penha. The assessing officer's opinion of treating the inseparable facilities, amenities, licenses and permissions provided under a revenue sharing agreement, as subletting of property cannot be upheld. The revenue sharing agreement has some clauses of inclusions and....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d from the hotel as business income in the AY 2012-13 and 2013-14. There is no change in any facts during this year. Hence, observing the principle of consistency as laid down by the Hon'ble Apex Court in the case of Radhasoami Satsang v. CIT (19921 193 ITR 321 (SC) wherein, it was held inter alia that in the absence of any material change justifying the Department to take a view different from that taken in earlier proceedings., the claim of the appellant for treating the receipt from business income deserves to be allowed. 6.7 Further after verification of facts and after considering the contentions of the assessing officer and submissions of the appellant, I find that in view of full compliance of conditions specified u/s 80ID of T....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to. 7. The Ld. DR placed reliance on para 4 of the Ld. AO's order which he supported. On the other hand, the Ld. AR drew our attention to the observation of the Ld. CIT(A) made in para 6.6 of his order wherein the Ld. CIT(A) observed that the Revenue has accepted and treated the share of profit received by the assessee from the hotel as business income in AYs 2012-13 and 2013-14 and that there is no change in any fact during the year. The Ld. AR referred to the assessment order dated 25.02.2015 passed by the Ld. AO under section 143(3) of the Act for AY 2012-13, a copy of which is placed at page 115-116 of the Paper Book. The Ld. AR also pointed out that it would be obvious from the chart placed at page 24 of Paper Book- II that the Ld. CI....