1. These four appeals--two by the revenue and two by the assessee--arise out of the orders of the Commissioner (Appeals) for the assessment years 1976-77 to 1979-80 in the case of Hotel Emerald (P.) Ltd. of Hyderabad.
2. The assessee, which is a company, is engaged in the business of running a hotel. It had claimed relief under Section 80J of the Income-tax Act, 1961 ('the Act'), and extra depreciation admissible for approved hotels. This claim was declined on the ground that there is no specific approval for these purposes by the Central Government as required under the statute. The first appellate authority found that there was such an approval in the Department of Tourism's letter No.7-TH-1(27)/80, dated 6-1-1981, for two years and not for the other two years. In the departmental appeals, it is contended that such approval was forthcoming only with effect from 13-8-1979 for reliefs other than development rebate and 12-11-1979 for the development rebate, since both these dates fell outside the accounting period which for the assessee was the year ending 31st January. In the assessee's appeals, the rather inconsistent decision of the Commissioner (Appeals) for the assessment years 1976-77 and 1979-80 to the effect that the approval does not apply for the two years in absence of 'actual order of the Government of India' is questioned. The learned departmental representative referred to the various correspondence filed by the assessee in its paper book to support the finding of the first appellate authority. According to him, the correspondence clearly indicates that there was no approval for the specified purposes for the years under consideration. The learned Counsel for the assessee, however, relied upon the very correspondence in support of his case. He pointed out that there was a letter as early on 4-5-1974, addressed to Associated Builders and Real Estate Agents, conveying the approval of the Department of Tourism to the hotel project 'from the point of view of its suitability for foreign tourists'. Such approval was to be final unless there was a change in the plan of the project without such approval for the change. It is the assessee's case that there has been no such change. It is claimed that the Central Government's approval referred in all the three sub-sections are satisfied with reference to this very letter. However, it appears that the ITOs were not satisfied with such kind of general approval and had insisted for approval under each such section for the years under consideration specifically. At the instance of the assessee the Federation of Hotel and Restaurant Association of India took up the matter with the Department of Tourism.
The Department of Tourism, by its circular dated 9-3-1978, clarified as under: I am glad to inform you that the matter regarding income-tax reliefs to hotels has since been resolved and settled to your satisfaction.
The Central Board of Direct Taxes (CBDT) have accepted our views that when the Department of Tourism issued certificates approving the hotels, it was the intention of the Department of Tourism to approve the hotels also for the purposes of various sections of the Income-tax Act, 1961, although these sections are not specifically mentioned in the approval certificates. The CBDT has, therefore, authorised this department to clarify this position in respect of each hotel to the concerned hotel companies. This is being done.
Simultaneously, instructions will be issued to the Income-tax Officers by the CBDT to treat the clarifications as forming part of the original certificates of approval issued by this department. I am sure this will meet the requirement of the hotel industry.
The assessee also got a separate letter from the Department of Tourism on the assessee's requesting clarification as under: With reference to your letter cited above, I am to inform you that your hotel project has been approved by the Department of Tourism, Government of India, New Delhi vide the letter No. 5. THI(48)/73, dated 4th May, 1974.
The assessee represented the matter to the CBDT on 13-8-1971, asking for direction or approval on the strength of the communications received from the Department of Tourism for all purposes, so that the assessee may not face any difficulty with the ITO. The assessee was informed by the CBDT as under: The powers to approve hotels under Section 80J/32 of the Income-tax Act, 1961, vest with the Department of Tourism. You may, therefore, apply to that department for the necessary action.
Since the ITO persisted with his action wanting separate specified approval for each section, the assessee addressed a letter to the Department of Tourism on 12-11-1979 explaining its requirements. The reminder was issued on 24-12-1979. The Department of Tourism came up with the following communication: I am to refer to your letter, dated 13-8-1979, addressed to the Central Board of Direct Taxes and to your letter, dated 12-11-1979, on the above subject and to certify that Hotel Emerald, Hyderabad, owned by M/s Hotel Emerald (P.) Ltd., Abid Road, Hyderabad, has been on the approved list of the Government of India for purposes of the following sections of the Income-tax Act, 1961: This communication, no doubt, authorises development rebate from 12-11-1979 and other reliefs from 13-8-1979. The assessee immediately took up the matter with the Department of Tourism, stating that this has been mentioned with reference to the assessee's letter asking for clarification and that the reliefs are required from the assessment year 1976-77 inasmuch as its accounts for first year of business was closed on 31-1-1976. It was also pointed out that approval was already granted earlier and that specific approval Was required only because the ITO wanted it. The reply which the assessee got from the Department of Tourism in its communication dated 20-1-1982, is as under: Please refer to your letter, dated 3rd November, 1981, regarding approval of your hotel under the Income-tax Act. The approval to your hotel has been granted in accordance with the provisions of the Income-tax Act.
Thereupon the assessee tried to take up the matter with the CBDT, so that the matter could be clarified by them but there was no reply. The matter is still pending with them. The assessee was reminding them periodically. In fact, the hearing of the appeals was also postponed because the assessee was confident of obtaining clarification which would set the matter at rest. The assessee meanwhile tried to get further clarification from the Department of Tourism as well. It got the following communication dated 13-9-1983: This has reference to your letter dated 23rd August, 1983, regarding approval of your hotel project under the Income-tax Act. In this regard, it may be mentioned that para (1) of this department letter No. 5. THI (48)/73, dated 4th May, 1974, clearly states that your hotel project has been approved by this department from 4th May, 1974. The same continues to be on the approved list of the department. It is not understood what further confirmation you require from this department.
Appeals are taken up now as the assessee has not obtained the clarification which it expected from the CBDT after many reminders to them. The learned Counsel submits that the very first letter dated 4-5-1974 gives the approval of the Government. It has been clarified that such approval will cover all the reliefs as is evident from the circular letter issued by the President of Federation of Hotel and Restaurant Association of India after he took up the matter with the Government. The dates mentioned in the Department of Tourism's letter dated 6-1-1981 were only with reference to the dates of letters, asking for specific exemptions which were not necessary. When the matter was again and again taken up, it has been clarified by them that it was approved from 4-5-1974 and that the hotel continues to be on the approved list even as mentioned on 13-9-1983. It is, therefore, contended that there is absolutely no scope for inferring that the project was approved only from the two dates mentioned in one of the letters addressed by the Department of Tourism, ignoring all other letters. He pointed out that the common words used in Sections 32(1)(v), 80J(6) and 33(1)(b)(B)(ii) of the Act are that there should be approval of the Government 'for the time being' either on this behalf or for the purpose of the sub-section. He referred to Stroud's Judicial Dictionary for the meaning of the phrase 'for the time being' to point out that in the context of tax assessment, 'for the time being' would mean the date of assessment as decided in the case of Wankie Colliery Co. v. IRC  2 AC 51. It was also pointed out that even the general meaning is to indicate an indefinite period of time including that which may arise after the enactment and that the question of a definite time will have to be ascertained with reference to the context in each case. He also referred to a decision of this Tribunal in the case of Hotels (Andhra) (P.) Ltd. [IT Appeal No. 1021 (Hyd.) of 1978-79, dated 8-8-1980], where a similar letter from the Ministry of Tourism was accepted by this Tribunal in the light of a clarification issued by the CBDT in that case as under: In view of the clarification given in the matter, the Board agrees that the original order dated 4th/6th November, 1965, approving the hotel, may be taken to cover the benefits under Section 80B(7)/80J(6)(d) of the Income-tax Act, 1961.
He also referred to another decision of this Tribunal in the case of Vazir Sultan Tobacco Co. Ltd. v. ITO  8 ITD 511, wherein this Tribunal had pointed out that what is required for Section 35CC of the Act was for a particular year and not for a particular date. In this decision, it was also pointed out that even where the date of approval is specifically mentioned in the statute, it may well be directory and not mandatory as found by the Calcutta High Court in the case of CIT v.Birla Bros. (P.) Ltd.  133 ITR 373. He also referred to the decision of the Andhra Pradesh High Court in the case of Warner Hindustan Ltd. v. ITO  134 ITR 158, where it was pointed out that an interpretation which deprives a taxpayer of the benefit intended by the statute cannot be entertained. In doing so, it followed the direction of the Supreme Court in Sheikh Gulfan v. Sanat Kumar Ganguli AIR 1965 SC 1839, wherein the Supreme Court referred to Halsbury's requirement that the words in statute "should be construed in the light of their context rather than what may be either their strict etymological sense or their popular meaning apart from that context".
He also cited number of other authorities to the same effect. The learned departmental representative reiterated its earlier stand that the Department of Tourism, in its communication dated 6-1-1981, has approved the assessee-hotel for relief from particular dates only. It was up to the assessee to get further clarification or correction from the Department of Tourism. The assessee has failed to get the same.
Under the circumstances, he wanted the orders of the ITO to be restored.
3. We have carefully considered the records as well as the arguments.
We find that the project has been approved on 4-5-1974 itself. The learned departmental representative tried to argue that the approval of the project does not mean that the hotel has been approved. It may be that the hotel was not constructed in accordance with the project report which had the approval. This argument loses its force when we consider the communication of the Department of Tourism dated 13-9-1983, wherein it was clearly stated that the approval given on 4-5-1974 continues till 13-9-1983. The only question, therefore, would be whether the impugned letter, which refers to some particular dates for approval for various sections, could restrict the relief only to later years. We do not think so for more than one reason. Such section-wise approval is really not necessary. It appears that the CBDT itself was of the same view as is evident from a letter issued by the President of the Federation of Hotel and Restaurant Association of India, extracted earlier. A confirmation all the same, if required, is available from the extract of a communication (reproduced in the immediately preceding paragraph) issued in another case by the CBDT that the original approval by the Department of Tourism could be taken as approval for purposes of Section 80B(7)/80J(6)(d). It was in this context that the Tribunal held that this approval would be available for Section 32(1)(v) or Section 33 in that particular case, taking the view that section-wise approval is not necessary. Hence, we have to hold that approval accorded on 4-5-1974 and reiterated on 13-9-1983 is an approval for all purposes of the Act inasmuch as the Government has chosen not to give section-wise approval, though probably contemplated by the statute itself. The communication dated 6-1-1981, repeating the same dates, has been the cause of a lot of misunderstanding. It is clear from the correspondence that the communication merely repeated the dates without understanding the implications thereof. The Department of Tourism also seems to think that this made no difference.
In the light of the assessee's arguments that no section-wise approval is contemplated, this communication should be taken as relevant only as reiteration of the approval for all the three reliefs contemplated and not for restriction of such relief with reference to any date. As stated earlier, the dates are clearly explained with reference to the assessee's representatives, which did not seek relief from any particular date or year. The Department of Tourism did not understand the assessee's request for correction or clarification as is evident from the fact that on 13-9-1983, it also wrote 'it is not understood what further confirmation you require from this department'. We are of the view that there has been approval for all the years and for all purposes when all the correspondence is read together and the practice of the CBDT itself, as is evident from what has been done in other cases, is considered. We also find, as argued by the assessee, that approval 'for the time being' as required by the statute has to be considered only in the context. Statute does not expect that there should be approval prior to the accounting year. Such approval should be from the Department of Tourism. While it is common sense that the requirements should be satisfied during the accounting year, such approval itself may come later. In this case, there was a prior approval and there is nothing on record to suggest that the approval ceased to be valid especially since the approval is reiterated after the accounting year as well. We do find that the very words 'for the time being' had been the subject-matter of interpretation before Court of Appeal because these words were found in Section 45(2) of the Finance (No. 2) Act, 1950, and were interpreted in Wankie Colliery Co.'s case (supra), where it was stated that the words 'for the time being' mean the 'date of assessment' and not during the period of charge. This decision squarely helps the assessee who is otherwise entitled to a clear finding that there was an approval both prior to and during the accounting years when the entire correspondence is read together. The words 'for the time being' have to be considered in the context of the statute. It is clear that the approval should relate to the year but it may be forthcoming after the accounting year. This, in our opinion, is the reasonable interpretation though, as repeatedly mentioned by us, it is our conclusion that there was an approval in the years themselves. We do not discuss a number of other cases cited by the learned Counsel because, in our view, the matter is clear especially in the light of repeated interpretations given for approved hotels by the Trade Associations, Department of Tourism and the CBDT either in circulars or with reference to the other specific cases mentioned in an earlier paragraph.
4. In the result, the assessee will be eligible for the reliefs under Sections 32(1)(v), 33(1)(b)(B) and 80J(6) in accordance with law. The ITO will quantify such relief after proper opportunity to the assessee, if the assessee satisfies the ITO about its eligibility to these reliefs on merits, in appropriate orders.
5. The departmental appeals are dismissed and the assessee's appeals are allowed.