2016 (12) TMI 1425 - AT - Income Tax

Disallowance of claim of deduction under section 80IC - misconstruction of the statutory provisions contained in the Act - Held that - From the submissions of the assessee, it reveals that the assessee has laid emphasis only on the rule of consistency, as can be seen from the written synopsis filed by the assessee before us. The observations of the Assessing Officer and the ld. CIT(A) in the light of various definitions of ecotourism as well as the observations made on the basis of office memorandum of finance bill, 2003 noted above also have not been countered by the ld. Counsel for the assessee. Complete examination is required on the norms of ecotourism whether existing in the present case or not. We, therefore, deem it expedient in the interest of justice to restore the entire matter to the file of Assessing Officer for deciding the issue afresh after considering the rule of consistency if the identical facts and circumstances are proved to exist in previous and subsequent years and also in terms of various norms of ecotourism as envisaged in the decision of Hon ble Uttarakhand High Court in the case of Aanchal Hotels (P) Ltd. (2016 (6) TMI 1033 - UTTARAKHAND HIGH COURT) relied on by the assessee before us. Needless to say, the assessee shall be given reasonable opportunity of being heard.- Decided in favour of assessee for statistical purposes.

Summary

Issues Involved:
Disallowed claim of deduction under section 80IC of the IT Act, 1961.

Detailed Analysis:

1. Background and Facts:
The appellant filed an appeal against the order of the ld. CIT(A) for the assessment year 2007-08 regarding the disallowance of the claim of deduction under section 80IC of the Act amounting to ?11,51,621. The appellant derived income from various sources, including a hotel business.

2. AO's Disallowance and Observations:
The Assessing Officer (AO) disallowed the deduction, emphasizing that the provisions of section 80IC were intended for ecotourism and not for regular hotel businesses. The AO found discrepancies in the appellant's claims related to eco-friendly practices and local resource utilization. The AO concluded that the appellant did not meet the conditions for deduction under section 80IC.

3. Appellant's Arguments and Authorities' Responses:
During the appeal, the appellant argued for consistency in allowing the deduction, citing previous years' approvals. However, the authorities emphasized that each assessment year must be evaluated independently based on the specific facts and circumstances.

4. Tribunal's Decision and Rationale:
The Tribunal observed that the appellant failed to address the AO's objections regarding ecotourism norms and specific discrepancies in the hotel's operations. The Tribunal noted that the rule of consistency applies only when identical facts exist across different years. As the appellant could not establish identical circumstances, the Tribunal decided to remand the matter back to the AO for a fresh assessment.

5. Conclusion:
The Tribunal allowed the appeal for statistical purposes, directing a reevaluation by the AO considering the rule of consistency and adherence to ecotourism norms. The appellant was granted a reasonable opportunity to present their case during the reassessment process.

This comprehensive analysis outlines the key aspects of the judgment, including the grounds for disallowance, the appellant's arguments, and the Tribunal's decision to remand the matter for a fresh assessment.