2014 (12) TMI 683 - HC - Income Tax

Entitlement for depreciation on Swimming pool @ 33.33% - Tribunal treating it as plant and machinery - Held that - Following the decision in Commissioner of Income-Tax Versus Anand Theatres 2000 (5) TMI 4 - SUPREME Court wherein it has been held that the building which is used as a hotel cannot be given depreciation as plant the order of the Tribunal cannot be upheld - Decided in favour of revenue.

Summary

Issues:
1. Depreciation rate on swimming pool claimed as plant and machinery.

Analysis:
The Tax Appeal was filed against an order passed by the CIT(A) whereby the appeal filed by the Revenue was dismissed, sustaining the order passed by the CIT(A). The assessee, a private limited company engaged in hotel services, claimed depreciation on a swimming pool at 33.33% as plant and machinery, while the Assessing Officer allowed it at 20%. The CIT(A) partly allowed the appeal, granting depreciation at 33.33%. The Revenue appealed to the ITAT, which dismissed the appeal and upheld the depreciation at 33.33%. The High Court heard arguments from both sides and admitted the appeal based on the question of whether the Appellate Tribunal was correct in confirming the depreciation rate of 33.33% on the swimming pool as plant and machinery. The issue was previously addressed in a different case, and the High Court referred to the decision in that case where the question was answered against the assessee. Consequently, the High Court ruled in favor of the Revenue, allowing the appeal and confirming the depreciation rate at 20%.

In conclusion, the High Court judgment resolved the issue of depreciation rate on the swimming pool claimed as plant and machinery. The decision was based on a previous case where a similar question was answered against the assessee. Therefore, the High Court ruled in favor of the Revenue, allowing the appeal and affirming the depreciation rate at 20%.