COMMISSIONER OF INCOME TAX Vs. ASIAN HOTELS LTD

JUDGEMENT

(1.) The Respondent-Assessee is in the hotel business. It is not in dispute that Respondent qualifies for benefit under Section 80HHD of the Income Tax Act (hereinafter referred to as "the Act") as it fulfills all the conditions for claiming that benefit.

(2.) The deductions under Section 80HHD is to be computed on the basis of the following formula:

(3.) The Assessing Officer included both the aforesaid components in the total receipts of the business and in this way as the figure of denominator increased; the deduction which became available to the Assessee under Section 80HHD was reduced. Reassessment order was passed on that basis. The Assessee challenged this before the CIT (A) successfully. The CIT (A) excluded both the receipts from the denominator while computing deduction under Section 80HHD of the Act on the ground that when they were not to be included in the numerator, i.e., in foreign exchange receipts, they could not be included in total receipts of the business, i.e., "total turnover" of the Assessee as well. The appeal of the Revenue assailing this order of CIT (A) has failed as the Income Tax Appellate Tribunal (hereinafter called as "the Tribunal") has dismissed the same vide impugned order dated 14th November, 2008.