Hotel building not treated as plant; depreciation and investment allowance claims fail where no manufacturing activity exists.

A hotel building specially designed or equipped for business does not become "plant" merely because of its fittings and equipment, so higher depreciation applicable to plant was unavailable. On the same reasoning, a hotel that does not manufacture articles or things is not an industrial undertaking for investment allowance purposes. The depreciation claim and investment allowance claim therefore failed, and the answer was against the assessee and in favour of the Revenue.

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Issues: Whether a hotel building and the fittings and equipment installed therein could be treated as "plant" for the purpose of depreciation, and whether the assessee was entitled to investment allowance on the footing that the hotel constituted an industrial undertaking.

Analysis: The applicable legal position, as settled by the Supreme Court, is that a hotel building specially designed or equipped for business does not thereby become a "plant". On that basis, the claim for higher depreciation applicable to plant could not be sustained. For the same reason, and since the hotel did not manufacture articles or things, it could not be regarded as an industrial undertaking so as to qualify for investment allowance.

Conclusion: The hotel building and its fittings and equipment were not plant, and the assessee was not entitled to investment allowance. The answer was against the assessee and in favour of the Revenue.

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