IN THE ITAT COCHIN BENCH
Hotel & Allied Trades (P.) Ltd.
versus
Deputy Commissioner of Income-tax, Circle-1(1)
IT APPEAL. NOS. 378 & 379 (coch.) of 2005, 552 (COCH.) OF 2006 & 598, 663-666 (Coch.) of 2007
[ASSESSMENT YEARS 1999-2000 to 2005-06]
OCTOBER 25, 2012
ORDER
B.R. Baskaran, Accountant Member
All these appeals filed by the assessee or the revenue, as the case may be, are directed against the orders passed by the Ld. CIT(A)-II, Kochi and they relate to the assessment years mentioned against the respective appeals in the caption stated above. All these appeals were heard together, since common issues are involved in them. Accordingly, these appeals are being disposed of by this common order, for the sake of convenience. However, we prefer to dispose of the appeals assessment year wise.
2. We shall take up the appeal filed by the assessee for the assessment year 1999- 2000. In this appeal, the assessee is challenging the validity of the re-opening of the assessment. It is noticed that the return of income filed by the assessee was initially processed u/s. 143(1) of the Act on 04-02-2002. Subsequently, the Assessing Officer reopened the assessment by issuing a notice u/s. 148 of the Act on 25-06-2002 after duly recording the reasons for the same. Thus, it is also noticed that the assessment has been re-opened within four years from the end of the assessment year and further the return filed by the assessee had been processed earlier only u/s. 143(1) of the Act. An identical question under identical set of facts was considered by the Hon’ble Supreme Court in the case of Rajesh Jhaveri Stock Brokers Pvt. Ltd. 291 ITR 500 and the Hon’ble Apex Court upheld the reopening of the assessment in that case. Hence, by following the said decision of the Hon’ble Supreme Court, we do not find any infirmity in the decision of the Ld. CIT(A) in upholding the re-opening of the assessment.
3. The next issue in this year relates to the deduction claimed u/s. 80HHD of the Act. The facts borne out of the record are that the assessee was operating two hotel units, viz., Hotel named at Bangaram Island and another hotel named Coconut lagoon. There is no dispute that both the units are eligible for deduction u/s 80HHD of the Act. It appears that the assessee claimed deduction u/s. 80 HHD of the Act in respect of each of the unit separately. However, the Assessing Officer aggregated the results of both the units and allowed deduction u/s. 80HHD of the Act on the combined profit. The Ld. CIT(A) also upheld the method followed by the Assessing Officer. Hence, the assessee is in appeal before us.
4. Both the parties has agreed that the impugned issue has been decided against the assessee by the Hon’ble Jurisdictional High Court of Kerala in the assessee’s own case reported in (2007) 294 ITR 67. We have gone through the said decision and notice that the very same issue was considered by the Hon’ble Jurisdictional High Court in the assessee’s own case relating to the assessment years 1992-93 and 1993-94, wherein the High Court has held that deduction u/s. 80HHD has to be computed with reference to the “profits and gains of the business as a whole”. Thus the contention of the assessee that the deduction u/s 80HHD is required to be computed for each eligible business separately has already been rejected by the Jurisdictional High Court. We notice that the decision rendered by the Ld. CIT(A) is in accordance with the binding decision of the Hon’ble Jurisdictional High Court of Kerala and hence, we do not find any reason to interfere with his decision.
5. The next issue in this year relates to the deduction u/s. 80-IA of the Act. The hotel unit named “Coconut lagoon” was eligible for deduction u/s 80-IA of the Act during this year. The AO computed the profit from this unit, after making certain disallowances, at Rs.1,69,55,436/-. The Assessing Officer noticed that the Gross total income of the assessee after aggregation of income from all heads stood at Rs.1,28,45,976/-. Accordingly, the AO took the view that the deduction u/s 80-IA should be computed on the Gross total income of Rs.1.28 crores and not on Rs.1.69 crores, as the Gross total income was less than the actual profit from the above said unit. Accordingly, the AO computed the deduction u/s 80-IA at Rs.48,87,518/- as given below:-
