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TMI Blog2001 (2) TMI 116X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income-tax Appellate Tribunal is legally justified in allowing depreciation and extra depreciation on hotel building by treating it as a plant ?" The facts giving rise to this reference, in short, are as follows : The assessee is a company running hotels at Udaipur. The hotels of the assessee-company were being operated by the Indian Hotels Company Limited and 50 per cent. of the net operating profits were paid as operation fees. The assessee-company claimed depreciation on the hotel building at the rate of 15 per cent. treating the same as plant. However, the Deputy Commissioner of Income-tax (Assessment), Special Range, Udaipur, vide his order dated February 28, 1989, did not accept the claim of the assessee and, as such, depreciat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and thus, confirmed the judgment dated February 13, 1990, passed by the Commissioner of Income-tax (Appeals) Jodhpur, Udaipur. Thereafter, the Income-tax Appellate Tribunal, Jaipur Bench, Camp Jaipur, was of the opinion that the findings recorded by it gave rise to a question of law fit for reference to the High Court and in these circumstances, the question of law, as quoted above, has been referred by the Tribunal on December 15, 1995, for answer by this court. The law relating to depreciation allowance has been mentioned in section 32 of the Income-tax Act. The assets in respect of which depreciation allowance is claimed must be either buildings, machinery, plant or furniture. The words "machinery" and "plant" bear the same meaning i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner brought to our notice a recent judgment of the Supreme Court in CIT v. Anand theatres [2000] 244 ITR 192 and submitted that the controversy involved in the present case is squarely covered by the said judgment of the Supreme Court. In Anand Theatres' case [20001 244 ITR 192 the Supreme Court has categorically held that building, which is used as a hotel or cinema theatre, cannot be given depreciation as plant, because : "The scheme of section 32 as discussed above clearly envisages separate depreciation for a building, machinery and plant, furniture and fittings, etc. The word 'plant' is given inclusive meaning under section 43(3) which nowhere includes buildings. The rules prescribing the rates of depreciation specifically prov ..... X X X X Extracts X X X X X X X X Extracts X X X X
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