ALLAHABAD, NOV 11, 2007 : NO manufacture in a hotel : A hotel industry is in the nature of a service industry. Strictly speaking, there is no manufacture or production of any ‘article’ in this industry. Even the food items and beverages, which are prepared in a hotel are to cater to the further comfort and service of their guests and, therefore, are commonly known as ‘catering services’. So, it would be wholly fallacious to extend the meaning of the word ‘manufacture’ and production used in the section in context to such catering services in the hotel industry. The order of the Tribunal holding that the assessee is entitled for investment allowance on hotel building, is not correct.

Value of the assessee’s leasehold rights in the computation of capital employed : In the balance sheet also no such asset finds place as claimed by the assessee to claim benefit of Rs.6 Lakhs (alleged value of the asset) as per assessee. The finding of the fact recorded by the Tribunal is that the assessee has not paid any thing by way of premium or otherwise except the liability to pay the annual rent. The Tribunal has rightly negatived the claim of the assessee with regard to the inclusion of Rs.6 Lakhs as asset of the leasehold right for the purposes of determination of benefits under section 80-J of the Income Tax Act. We find no error on this score in the order of the tribunal and the same is on terra-firma.

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