MAHASHE RESORTS PRIVATE LIMMITED,SHIMLA vs. DCIT CC SHIMLA, SHIMLA

ITA 1200/CHANDI/2025Status: DisposedITAT Lucknow28 September 2026AY 2017-183 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that Section 115BBE is prospective in nature and does not apply to AY 2017-18, citing the decision in Deepak Maratha and concurring views of several Coordinate Benches. Consequently, Ground No. 4 of the appeal was allowed. Regarding depreciation, since the amount was declared for investment in fixed assets and capitalized, and Section 115BBE was held inapplicable for AY 2017-18, there was no reason to disallow depreciation. Therefore, Ground No. 1 was also allowed. Grounds No. 2 and 3 were considered consequential and thus allowed without separate adjudication. The appeal of the assessee was allowed in full.

What were the facts?

The assessee, Mahashe Resorts Private Limited, filed an appeal against the order of the CIT(A)-3, Gurgaon, for Assessment Year 2017-18. A survey under Section 133A of the Income Tax Act was conducted, during which the assessee admitted unexplained income of Rs. 80,00,000/- as unexplained capital investment for renovation of Eutopia Resort. This amount was offered as income in the return, capitalized, and depreciation of Rs. 4,00,000/- was claimed. The Assessing Officer (AO) treated the Rs. 80,00,000/- as unexplained income under Section 69 read with Section 115BBE and disallowed depreciation. The CIT(A) confirmed these additions. The dispute pertains to the assessment year 2017-18.

What were the issues?

1. Whether the AO erred in disallowing depreciation of Rs. 4,00,000/- on the capitalized amount (mixed law and fact, concerning Section 32). 2. Whether the AO erred in treating the declared income of Rs. 80,00,000/-, offered as per surrender, as unexplained income under Section 69 (mixed law and fact). 3. Whether there was double taxation of the surrender amount of Rs. 80,00,000/-, which was already credited to the P&L account and offered to tax (mixed law and fact). 4. Whether the AO erred in applying Section 115BBE to the surrendered income of Rs. 80,00,000/- (question of law, concerning Section 115BBE). Assessee's contentions: Section 115BBE does not apply to AY 2017-18 as it is prospective, relying on the Rajasthan High Court decision in Deepak Maratha. The declared amount was unexplained capital investment, correctly capitalized, and depreciation was rightly claimed. Revenue's contentions: The revenue relied on the orders of the lower authorities.

Which sections of the Income-tax Act were involved?

Section 133A,Section 69,Section 115BBE,Section 32

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
आयकर अपीलीय अिधकरण,च"ीगढ़ "ायपीठ “बी” , च"ीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “B”, CHANDIGARH HEARING THROUGH: VIRTUAL MODE "ी लिलत कुमार, "ाियक सद" एवं "ी िवजय वमा" , लेखा सद" BEFORE: SHRI. LALIET KUMAR, JM & SHRI. VIJAY VARMA, AM आयकर अपील सं./ ITA No. 1200 /Chd/ 2025 िनधा"रण वष" / Assessment Year : 2017-18 Mahashe Resorts Private Limited बनाम The DCIT Mahashe House Near Lift, The Mall CC Shimla Shimla, Himachal Pradesh-171001 "ायी लेखा सं./PAN NO: AAICM5984A अपीलाथ"/Appellant ""थ"/Respondent िनधा"रती की ओर से/Assessee by : Shri Rajiv Sood, C.A राज" की ओर से/ Revenue by : Dr. Ranjit Kaur, Addl. CIT, Sr. DR सुनवाई की तारीख/Date of Hearing : 10/09/2026 उदघोषणा की तारीख/Date of Pronouncement : 28/09/2026

आदेश/Order PER VIJAY VARMA, A.M: This is an appeal filed by the Assessee against the order of the Ld. CIT(A)-3, Gurgaon dt. 16/07/2025 for the Assessment Year 2017-18. 2. In the present appeal Assessee has raised the following grounds:

1.

Disallowance of Depreciation of Rs. 4,00,000/-The Learned Assessing Officer (AO) has erred in law and on facts in disallowing depreciation of Rs. 4,00,000/-.

2.

Treating Declared Income as Unexplained Income u/s69. The AO

The order continues below.

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