2002 (10) TMI 82 - HC - Income Tax

This appeal filed by the Department is against the order of the Tribunal cancelling the order issued by the Commissioner of Income-tax (Appeals) under section 263 of the Income-tax Act, 1961, disallowing depreciation at the rate applicable to plant on the nursing home of the assessee. The Tribunal following the Full Bench decision of this court in CIT v. Hotel Luciya, and that of the Supreme Court in CIT v. Dr. B. Venkata Rao, held that the assessee is entitled to depreciation on the hospital building at the rate applicable to plant , and reversed the order of the Commissioner issued under section 263 of the Act. - We, set aside the order of the Tribunal and since the findings on facts are required we remand the matter to the officer for deciding the matter afresh after calling for details from the assessee and the officer will decide the matter in the light of the decisions above referred to and our above observations and grant depreciation at the rate applicable to plant only to so much of the area qualifying as plant .

Summary

The High Court of Kerala allowed the appeal filed by the Department regarding depreciation on a nursing home, remanding the matter for fresh decision based on specific criteria for qualifying as "plant". The Tribunal's blanket order was set aside, emphasizing the need for detailed consideration of the issue. The judgment referred to previous decisions and highlighted the importance of proving the specific areas of a building that qualify as "plant" for depreciation purposes.