Depreciation on pond as plant rejected after Supreme Court reversal made later binding precedent controlling.

A pond could not be treated as plant for depreciation where the earlier Kerala High Court basis had been reversed by the Supreme Court in Anand Theatres. The controlling ruling held that a building used as a hotel or theatre is not plant for depreciation purposes, and that binding principle displaced the Tribunal's reliance on Hotel Luciya. Applying the later Supreme Court authority, the characterization of the pond as plant was not sustainable, and the Revenue's position prevailed.

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Issues: Whether the pond in the assessee's case was required to be treated as plant and therefore entitled to depreciation at the rate applicable to plant and machinery.

Analysis: The Tribunal had granted relief to the assessee by following the Full Bench decision in Hotel Luciya. That foundation no longer survived because the Supreme Court in Anand Theatres specifically reversed the Kerala High Court ruling and held that a building used as a hotel or theatre could not be treated as plant for depreciation purposes. In view of that controlling decision, the treatment of the pond as plant could not be sustained.

Conclusion: The issue was answered in favour of the Revenue and against the assessee.

Final Conclusion: The Tribunal's orders were set aside and the Assessing Officer's orders were restored, resulting in allowance of the Revenue's appeals.

Ratio Decidendi: Where a prior precedent on the characterization of an asset for depreciation has been reversed by the Supreme Court, the later binding ruling governs and the asset cannot be treated as plant unless it independently satisfies that legal test.

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