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TMI Blog1986 (3) TMI 62X X X X Extracts X X X X X X X X Extracts X X X X ..... t Commissioner, however, set aside the assessment on November 30, 1973. On February 19, 1977, the petitioner made an application to the Secretary, Ministry of Tourism, for approval under section 84(3) of the Act. The petitioner also made a similar application on February 23, 1977, to the Secretary, Ministry of Finance. The applications are in identical terms which are, inter alia, to the following effect : " We have received approval under section 80J(6)(d) of the Income-tax Act, 1961, of our 'Hotel Oberoi Inter-Continental', vide letter No. F-No. 15/18/69-IT(AI), dated June 10, 1970, issued by Sri L. N. Gupta, Under Secretary to the Government of India, Ministry of Finance (Department of Revenue Insurance), a copy of which is enclosed herewith. It will be evident from the copy of the said letter that 'Hotel Oberoi Inter-Continental' has been approved for the purpose of clause (d) of sub-section (6) of section 80J of the Income-tax Act. It may be noted here that section 80J of the Income-tax Act is applicable from the assessment year 1968-69, as the said section has been brought into force with effect from April 1, 1968, and prior to that, section 84 of the Income-tax Act w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o represent the case by us on behalf of the company. " Thereafter, a reminder was sent to the Secretary, Central Board of Direct Taxes, on July 22, 1978, but no reply was received. During the pendency of the said representation before the Central Board of Direct Taxes, the Income-tax Officer completed the assessment for the assessment year 1967-68 and disallowed the claim made by the petitioner under section 84 of the said Act. The Income-tax Officer has also disallowed the deficiency to be carried forward by applying section 80J(3) of the Act. Against the said order, the petitioner preferred an appeal before the Appellate Assistant Commissioner which is pending. The application was moved on September 26, 1978, challenging the order contained in the letter dated October 18, 1977, written by the Under Secretary, Central Board of Direct Taxes, and for grant of necessary approval of the Oberoi Inter-Continental Hotel under section 84(3)(d) of the Act. Upon the said application, rule nisi was issued and an interim order was also passed to the effect that the appeal pending before the Appellate Assistant Commissioner may be heard but no final order should be passed and no deman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he application dated October 11/15, 1969, from M/s. Ray Ray, Chartered Accountants, made on your behalf on the above subject and to say that the Central Government approves 'M/s. Oberoi Inter-Continental Hotel' owned by M/s. East India Hotels Ltd., Calcutta, for the purpose of clause (d) of sub-section (6) of section 80J of the Income-tax Act, 1961. The period and the extent to which deduction shall be allowed in computing the total income will be subject to the provisions of sub-sections (1) and (2) of section 80J of the Income-tax Act, 1961, and other conditions attached thereto." The Board did not mention in the said order as regards the approval of the hotel in terms of section 84(3). The Income-tax Officer held in its original assessment order as follows: " With regard to the claim under section 84, the assessee company has fulfilled the conditions as laid down in section 84 and, therefore, no income-tax is to be paid by the assessee on so much of the profits and gains derived from a business of a new hotel. The report of the Chairman for the year ended March 31, 1966, shows that the ultra modern luxury hotel which was under construction by the company at New Delhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-tax shall not be payable by an assessee on so much of his profits and gains derived from his industrial undertaking to which that section applied, as did not exceed 6 per cent. per annum on the capital employed therein computed in the prescribed manner. Section 80J was inserted in the Act and section 84 was repealed by the Finance (No. 2) Act, 1967, with effect from April 1, 1968. Section 80J provides, inter alia, that where the gross total income of an assessee includes any profits and gains derived from a newly established industrial undertaking, in computing the total income of the assessee, a deduction from such profits and gains shall be allowed of so much of the amount thereof as does not exceed the amount calculated at the rate of 6 per cent. per annum on the capital employed in the relevant accounting year. Sub-section (3) of section 80J provides that where profits and gains of an industrial undertaking have not been sufficient in any year to absorb such deduction, such unabsorbed tax concession (which is called the deficiency) shall be carried forward to the following years and shall be set off against the profits and gains of such years subject to a limit of seven years ..... X X X X Extracts X X X X X X X X Extracts X X X X
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