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Issues:
1. Interpretation of section 32(1)(v) of the Income-tax Act, 1961 regarding initial depreciation for hotel buildings. 2. Whether initial depreciation granted in earlier years should be deducted in determining the written down value for the assessment year 1984-85. 3. Whether the deletion of certain words in a statutory provision has retrospective effect. 4. Whether a hotel building can be considered as a plant for the purpose of depreciation under section 32 of the Act. Analysis: 1. The judgment addresses the interpretation of section 32(1)(v) of the Income-tax Act, 1961, specifically focusing on the initial depreciation granted to hotel buildings. The court highlighted the amendment brought by the Finance Act 11 of 1983, which deleted certain words from the provision, altering the treatment of initial depreciation. The court emphasized that each assessment year is considered independently, and depreciation is allowed progressively as assets depreciate over time. 2. The court examined whether the initial depreciation granted in earlier years should be deducted in determining the written down value for the assessment year 1984-85. It was established that the initial depreciation granted before April 1, 1984, should not be subtracted from the value of the building for calculating the written down value at the commencement of the assessment year 1984-85. The court clarified that depreciation for that year should be calculated based on the written down value as it existed at the beginning of the assessment year. 3. Regarding the retrospective effect of the deletion of certain words in the statutory provision, the court ruled that the deletion did not have the effect of taking away benefits enjoyed by the assessee in earlier years. The court emphasized that unless there are explicit statutory provisions depriving the assessee of a benefit given in previous years, the deletion of words in a provision prospectively does not intend to revoke previously enjoyed benefits. 4. Lastly, the court addressed whether a hotel building can be considered a plant for the purpose of claiming depreciation under section 32 of the Act. Referring to previous judgments, the court concluded that a hotel building cannot be categorized as a plant for depreciation purposes. The court upheld the view that the assessee's hotel building should not be treated as a plant, ruling in favor of the Revenue on this issue. In conclusion, the judgment provided a detailed analysis of the issues related to initial depreciation, written down value calculation, retrospective effect of statutory amendments, and the classification of a hotel building as a plant for depreciation purposes.
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