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| The Tax Publishers2020 TaxPub(DT) 1750 (Var-Trib) : (2020) 181 ITD 0486 INCOME TAX ACT, 1961
Section 35AD
Once conditions of section 35AD are fulfilled, the section per se, not requiring any specific date of operation, deduction thereunder could not be disallowed, especially when certificate of classification issued in favour of assessee had not been doubted. Granting of certificate classifying hotel as four star in a year subsequent to the year under consideration will not make any difference.
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Business deduction under section 35AD - Expenditure on specified business - Classification certificate certifying Hotel as a four-star hotel - Granted in the year subsequent to the year under consideration
Assessee-company operating hotels under the brand name 'Taj' claimed deduction under section 35AD in respect of its newly commenced hotel at Gondia, Maharashtra. AO denied deduction on the ground that certificate approving four-star hotel category was issued by Ministry of Tourism, in respect of the Gateway Hotel, post passing of assessment Order, dated 30-12-2017, on 30-1-2018, with effect from 29-1-2018, valid till 28-1-2023; that section 35AD being an exemption provision, had to be strictly interpreted; and since assessee did not have requisite classification certification in the year under consideration, benefit of deduction could not be provided to assessee. Held: Date of issuance of certificate period for which classification has been granted, is irrelevant for grant of deduction under section 35AD. Once conditions of section 35AD are fulfilled, the section per se, not requiring any specific date of operation, deduction thereunder could not be disallowed. Especially when certificate of classification issued in favour of assessee had not been doubted.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2015-16
IN THE ITAT, VARANASI BENCH
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