Commissioner of Income Tax Varanasi and Another vs M/s Banaras Hotels Limited, Nadesar, Varanasi

Present appeal filed u/s 260-A of the Income Tax Act against the order dated 30th June, 2003 passed by the Income Tax Appellate Tribunal, Allahabad has been admitted on the following substantial question of law:

1.Whether on the facts and in the circumstances of the case, the Tribunal is justified in allowing deduction u/s 80HHD of the Income tax Act, 1961 in respect of room tariff realized from the foreign tourists?

Whether on the facts and in the circumstances of the case, the Tribunal is justified in law in holding that the word ''service'' includes the amount of room tariffs realized from the foreign tourists within the meaning of sub-clause (a) of section 80HHD of the Income Tax Act, 1961?

The appeal relates to the Assessment Year 1994-95. The assessee runs a five star hotel under the name and style ''Hotel Taj Ganges'' and derives income there from. It had claimed deduction u/s 80HHD of the Income tax Act, 1961 at Rs. 56,40,135/- which represented total amount realized from foreign tourists inclusive of room tariffs. The Revenue restricted the deduction at Rs. 22,30,750/- . In the appeal preferred by the assessee the Commissioner of Income Tax (Appeals), Varanasi vide order dated 12.9.1997 allowed the appeal and directed the Assessing Officer to compute the admissible deduction u/s 80HHD of the Income tax Act, 1961 after taking into consideration the room tariff also which should be within the expression, ''services provided to foreign tourists''. The Revenue''s appeal preferred before the Tribunal failed. The Tribunal has followed its earlier order in respect of the Assessment Year 1993-94.

We have hard Sri A.N. Mahajan, learned Senior Standing Counsel, Income Tax Department.

We find that similar question came up for consideration before this Court in respect of the Assessment Year 1990-91 and this Court in The Commissioner of Income Tax, Varanasi & another vs. M/s Banaras Hotel Ltd. Nadesar Palace Compound, V arenas 2009 U.P.T.C. 1373 vide judgment and order dated 28th October, 2009 has been pleased to hold that the room tariff should also be taken into consideration for granting deduction u/s 80HHD of the Income tax Act, 1961. The facts being similar and the questions raised herein have also been decided by this Court in the assessee''s own case in respect of the Assessment Year 1990-91, respectfully following the aforesaid decision, we do not find any legal infirmity in the order of the Tribunal. The appeal fails and is dismissed.