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TMI Blog2015 (8) TMI 71X X X X Extracts X X X X X X X X Extracts X X X X ..... ious reading of the Act clearly says that though the approval of the prescribed authority, viz. the DGIT(Exemption) is a pre-condition, the initial assessment year shall be the year in which the assessee hotel started functioning for the purpose of computing ten assessment years for grant of deduction u/s 80IA of the Act. If the assessee could not obtain the approval of the prescribed authority, viz. DGIT (Exemption) for any of the years after started functioning of the hotel, then the assessee may not be eligible for deduction u/s 80IA for those assessment years. The assessee can claim deduction only in respect of the remaining assessment year from the year in which the approval was granted by the prescribed authority. A harmonious reading of section 80IA as it stood at the relevant point of time and the provisions of section 80IB, as it stands now, this Tribunal is of the considered opinion that the initial assessment year is the year in which the assessee started functioning of the hotel and not the year in which the approval was granted by the prescribed authority. Thus the Administrative Commissioner has rightly exercised his revisional jurisdiction since grant of deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ming deduction u/s 80IA. The prescribed authority, according to the ld.representative, is the DGIT (Exemption). According to the ld.representative, section 80IA(4)(iiia) and section 80iA(4)(v) provides for twin condition to be fulfilled for the purpose of claiming deduction u/s 80IA of the Act. According to the ld.representative, mere starting a hotel is not sufficient for claiming deduction u/s 80IA. The approval of the DGIT(Exemption) is an essential pre-condition. Therefore, according to the ld.representative, the initial year for grant of deduction u/s 80IA shall be the year for which the approval was granted by the DGIT (Exemption). Since the DGIT (Exemption) specifically says that the approval was with effect from assessment year 2000-01, according to the ld.representative, the assessee is eligible for exemption for the year under consideration. Referring to section 80IA(6)(ii), the ld.representative submitted that the assessee is eligible for exemption for 10 assessment years for claiming deduction u/s 80IA of the Act. Referring to sub clause (iv) of section 80IA(6), the ld.representative submitted that the words consecutive assessment years have been omitted in sub clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, according to the ld.DR, the CIT has rightly revised the order of the assessing officer. 6. We have considered the rival submissions on either side and also perused the material available on record. From the material available on record it appears that the assessee started its hotel business from the assessment year 1999-2000. This is not in dispute. If the initial assessment year for claiming deduction u/s 80IA is taken as 1999-2000, then the ten assessment years expired by assessment year 2008-09. Therefore, the assessee may not be eligible for exemption for the year under consideration. If we take the initial assessment year as 2000-01 from the year in which the approval was granted by the prescribed authority, viz. DGIT (Exemption), then the assessee may be eligible for deduction u/s 80IA of the Act. Thus, the actual dispute confines only to the issue as to what was the initial assessment year for which the assessee was eligible for claiming deduction u/s 80IA of the Act? In other words, whether the initial assessment year is the year in which the assessee started functioning its business or the year in which the prescribed authority granted approval u/s 80IA of the Act fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fty per cent of the profits and gains derived from the business of such hotel: Provided that the said hotel is approved by the prescribed authority for the purposes of this clause in accordance with the rules made under this Act; (iii) to (vi) xxxxxxxxxxxxxxxxxxxxxxxxxxxxx (6) The number of assessment years referred to in sub-section (1) shall, including the initial assessment year, be- (i) xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx (ii) ten in the case of an assessee, not being a co-operative society, deriving profits and gains from an industrial undertaking specified in sub-clause (a) or sub-clause (b) or sub-clause (d) of clause (iv) of sub-section (2) or located in an industrially backward district of Category A specified in sub-clause (c) of clause (iv) of that sub-section; (iia) to (12)(b) xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx (c) initial assessment year - (1) In the case of an industrial undertaking or cold storaqe plant or ship or hotel, means the assessment year relevant to the previous year in which the industrial undertaking begins to manufacture or produce articles or things, or to operate its cold storage plant or plants or the ship is firs ..... 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