Saturday, 20 May 2017

Sec.80HHD not analogous with Sec.80HHC, allows deduction without reducing ineligible hotel’s losses

Madras HC upholds ITAT order for AY 1998-99, holds that while computing 'eligible profit' for allowing deduction u/s 80HHD(1) (available to companies running hotels) loss from ineligible units/hotels cannot be deducted; Rejects Revenue’s stand that the expressions ‘business profits’ and ‘total receipts’ used in Sec. 80HHD(3) [prescribing formula for computing ‘eligible profits’], should take into account the gains/losses of ineligible entities as well;  Noting that Sec. 80HHD is a ‘beneficial provision’, HC opines that “full benefit of the provision should be extended to an eligible assessee without there being an attempt to whittle down the same.”; HC rules that “sub-section (3) has to be read along with sub-section (1) by statutory prescription and in such an event, all parameters of the formula should relate solely to the receipts/profits/income of the eligible unit alone and none other.”; Cites Karnataka HC ruling in ITC Hotels Ltd., holds that the deduction should be granted qua eligible unit/units only, clarifies that Revenue cannot draw support from Sec. 80HHC provisions and the two provisions (i.e Sections 80HHC and 80HHD) are not analogous:HC 

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CBDT issues second round of frequently asked questions in relation to Direct Tax Vivad Se Vishwas Scheme, 2024

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