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TMI Blog1992 (7) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... 81 the claim had been allowed in the original assessments. Later on such assessments were reopened for disallowing this claim. Similarly, for the assessment years 1982-83 and 1983-84 the claim was disallowed. The reason adopted by the Income-tax Officer was that the assessee could not be considered to be engaged in the manufacture of any article in respect of the food prepared in the restaurants for supply to the customers. This was confirmed on appeal. In the further appeals before us it was contended on behalf of the assessee that in several other cases, such as Shyam Enterprises [IT Appeal Nos. 453 to 457 (Mad.) of 1988 dated 27-3-1991] it has been held by the Tribunal that a restaurant also must be recognised as engaged in the manufactu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el rooms. 3. We have considered the rival submissions and also perused the decisions referred to both sides. Section 32A grants investment allowance in the case of an assessee who is engaged in the business of manufacture or production of any article or thing. The Calcutta High Court had held in the case of S. P. Jaiswal Estates (P.) Ltd. that an assessee running a five star hotel cannot be considered to be engaged in the business of manufacture of an article or thing because its main purpose was to run the hotel as a lodging house and the restaurant was only the necessary adjunct. In the present case, however, the restaurants cannot be considered to be necessary adjuncts because they were not maintained only for the purpose of catering t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urpose of section 32A, we do not think that the claim of this assessee should be denied only because its restaurants are attached to a hotel. We accordingly direct the ITO to grant the investment allowance and re-compute the income. In this view we find it unnecessary to consider the grounds relating to the re-opening of the assessments for the assessment years 1979-80 and 1980-81. 4. The appeals of the revenue are directed against the decision of the CIT(Appeals) to grant depreciation on the hotel building treating it as a 'plant'. He followed the decision of the Appellate Tribunal in the case of Hotel Srilekha (P.) Ltd. v. Third ITO [1983] 5 ITD 541 (Mad.) where it was held that a hotel building itself should be regarded as a 'plant' as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was submitted that in the circumstances when the building has already been recognised as a 'plant', if the word 'premises' is taken to mean the land, then the assessee would be entitled to extra depreciation. It was also pointed out that by implication this building has already been granted depreciation at 15% i.e., 10% normal plus 5% extra in the order of the Tribunal, cited above. On the other hand, the revenue supported the order of the CIT(Appeals) on this issue. We find that the building has already been recognised as a 'plant' for depreciation purposes since it satisfies the functional test. It would, therefore, be inconsistent to deny the extra depreciation since the depreciation table allows extra depreciation on the plant. As point ..... X X X X Extracts X X X X X X X X Extracts X X X X
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