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Whether the building used as a cinema theatre constitutes plant and is entitled to higher rate of depreciation. Analysis: The judgment delivered by Judge V. V. Kamat addresses the issue of whether a building used as a cinema theatre can be considered as a plant and thus qualify for a higher rate of depreciation. The Revenue challenged the Tribunal's finding that the building in question constitutes a plant and is eligible for higher depreciation rates. The court examined the statutory provision of section 32(1) of the Income-tax Act, 1961, which allows depreciation on buildings, machinery, plant, or furniture used for business or professional purposes. The court emphasized that ownership and use are crucial factors for claiming depreciation benefits. The court clarified that the statutory provision specifies separate calculation methods for depreciation on buildings, machinery, plant, or furniture, indicating that they are distinct and individual items for depreciation purposes. The court's reasoning was further supported by the language of section 32A of the Act, which distinguishes between "machinery" and "plant" as separate entities. The court reiterated that depreciation is granted based on ownership or use of the property, which includes buildings, plant, machinery, and furniture. Different depreciation rates apply to each of these categories. The court rejected the argument that the nature of the property (hotel, cinema theatre, factory) should impact the depreciation claim, emphasizing that the statutory provision applies uniformly regardless of the property's specific use. The court addressed the counsel's reliance on a decision by the Allahabad High Court regarding the classification of cinema buildings and fittings as plants for depreciation purposes. The court noted that the specific question in the present case was whether the building used as a cinema theatre qualifies as a plant in its entirety. The court concluded that the statutory provision's language applies uniformly to buildings used for different purposes and upheld the Revenue's position against the assessee. The court decided in favor of the Revenue, denying the assessee's claim for higher depreciation rates on the building used as a cinema theatre. The judgment will be communicated to the Income-tax Appellate Tribunal, Cochin Bench, as required by law.
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