TaxTMI 
TaxTMI 
2014 (5) TMI 193
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....been referred to by the Tribunal for consideration of this Court:- "Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in allowing the claim for investment allowance u/s 32A on the ground that the preparation of food articles in a hotel may be treated as manufacturing of goods?" 3. The brief facts as emerging on the face of record are that the respondent assessee is running a hotel at Jaipur in the name of Hotel Mansingh and at the relevant point of time, the hotel operation was managed by the ITC Ltd. in terms of the agreement, which was renewed from time to time. The short controversy is as to whether preparation of food articles in the hotel can be said to be manufacturing of goods and ....
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....ourt has held that a hotel cannot be held to be a plant. He relied upon the judgments of Hon'ble Apex Court in the case of Commissioner of Income Tax vs. Anand Theatres reported in (2000) ITR 244 page 192, Indian Hotels Co. Ltd. & Ors. vs. Income Tax Officer & Ors. reported in (2000) ITR 245 Page 538, Commissioner of Income Tax Vs. SB Properties & Enterprises Ltd (assessee) reported in (2004) 190 CTR (Raj.) 516 and Commissioner of Income Tax Vs. Indo Continental Hotel & Resorts and Hotel Man Singh (assessee) reported in (2002) 125 TAXMAN 58 (RAJ.) and, therefore, submitted that the reference deserves to be allowed in favour of the revenue and against the assessee. 9. Shri Vivek Singhal, learned counsel for the respondent assessee was....
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....el building remains a building even when constructed to a luxury specification and also a hospital building for infectious diseases which might require special lay-out and other features was not held to be a plant by observing that a purpose-built building is no more than the premises in which the business is conducted. Further, there are hotels of all kinds and hotel business can be carried on in all kinds of buildings, may be pucca or kacha constructions. A building intended to be used or in fact used earlier either as a residential accommodation or business purpose can be converted for running hotel business. Section 32 itself contemplates, a hotel business being carried on in a residential accommodation including accommodation which ....
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....carrying on any trade or business building is required. On occasions a building may be designed and constructed to suite the requirement of a particular Industry, trade or business. But that would not make such building plant. It only shelters running of such business. For each and every business, trade or industry, a building is required to carry on such activity. That means the building plays some role and in other words, its function is to shelter the business, but it has no other function except in some rare cases such as dry dock where it plays an essential part in the operations which take place in getting a ship into the dock, holding it securely and then returning it to the river. Building is more durable. If the contention of the a....
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....t held that investment allowance under Section 32A is not available in respect of machinery installed for the purpose of business of the assessee which is engaged in the business of running a hotel as it is essentially a trading activity. Similarly the Calcutta High Court in C.I.T. v. S.P. Jaiswal Estates (P) Ltd. (1992) 196 ITR 179 held that an assessee who claims investment allowance under Section 32A of the Act has to be (1) an industrial undertaking carrying on the business of manufacturing or producing any article or thing, therefore, the business itself has to be that of manufacture or production; (2) the processing of an article or thing is outside the scope of this provision; and (3) the business of a hotel is essentially a non-manu....