February 2019

Business expenditure Deduction u/s. 35AD Specified business Hotel Business Commencement of new business not disputed by Department and income offered to tax accepted Certification of hotel as three-star category hotel in subsequent year Time taken by competent authority for certification beyond control of assesse Assessee not to be denied deduction u/s. 35AD on the ground that the certification was in the later year

K. B. Bhujle
Advocate

43.  CIT vs. Ceebros Hotels Pvt. Ltd.; 409 ITR 423 (Mad) Date of order: 13th November, 2018 A Y. 2011-12 Section 35AD of ITA 1961

 

Business expenditure Deduction u/s. 35AD Specified business Hotel Business Commencement of new business not disputed by Department and income offered to tax accepted Certification of hotel as three-star category hotel in subsequent year Time taken by competent authority for certification beyond control of assesse Assessee not to be denied deduction u/s. 35AD on the ground that the certification was in the later year

 

The assessee was in the hotel business running a three-star hotel. The assessee commenced the business in the A. Y. 2011-12 but the certification of the three-star was received only in the subsequent year. For the A. Y. 2011-12, the Assessing Officer denied the benefit of deduction u/s. 35AD(5)(aa) of the Act on the ground that the assesse obtained classification as three-star category hotel only during the subsequent year, i.e., A. Y. 2012-13.

 

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