CIT Vs. ADYAR GATE HOTEL LTD

JUDGEMENT

(1.) The above tax case appeals are directed against the order of the Income Tax Appellate Tribunal in I.T.A. Nos. 1520 and1521/Mds/2002, dated 31-5-2006, for the assessment years 1996-97 and1997-98, respectively, raising the following substantial question of law.

(2.) The brief facts that led to the filing of the above appeals are as under.

(3.) The assessee is engaged in the business of running hotels. For the assessment years 1996-97 and 1997-98, the assessee filed the returns claiming relief under Section 80HHD of the Act and the same was allowed by the assessing officer. Finding that the deduction under Section 80HHD was computed including the interest earned on short-term deposits, the assessing officer passed an order of rectification that the interest received is taxable under the head "Income from other sources". Hence, the assessee filed appeals before the Commissioner (Appeals). The Commissioner (Appeals) dismissed the appeals on the ground that the assessing officer had rightly rectified the assessment. On further appeals preferred by the assessee before the Income Tax Appellate Tribunal, the Tribunal, holding that the assessing officer has exceeded in his jurisdiction while acting under Section 154 of the Act, as the issue was a debatable one, allowed the appeals. Hence, the present appeals.