2002 (8) TMI 9

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ecision in CIT v. Taj Mahal Hotel [1971] 82 ITR 44?" The reference is required to be considered in the background of specific provision granting depreciation to building, machinery and plant under section 32 of the Income-tax Act, 1961, and the decision of the apex court in CIT v. Taj Mahal Hotel [1971] 82 ITR 44. The respondent-assessee, Jodhan Real Estate Development Company (P.) Ltd., Jodhpur is having source of income, as per the return filed, from dealing in the real estate business and exhibiting films at its own cinema hall, namely, Darpan Cinema. For the assessment year 1986-87, the assessee claimed depreciation on sanitary fittings at the rate of 15 per cent. The Assessing Officer held that sanitary fittings are a part of the....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....sy involved is concluded by the said decision of the apex court. A Division Bench of this court in CIT v. Lake Palace Hotels and Motels P. Ltd. [1997] 226 ITR 561 considered the question whether the building which is used as a hotel or cinema hall can be considered to be apparatus or tool for running the business so that it can be termed as plant and depreciation can be allowed accordingly. This court after referring to a number of judgments and dictionary meaning held that hotel and cinema premises will fall within the definition of building. The High Court summarised various principles emerging from various decisions of different courts. For the decision of the instant reference, we may refer to the principle laid down at item No. (iv)....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....R 214 (CA) could be treated as having been used for the purpose of the business of the trader, it is incomprehensible how sanitary fittings can be said to have no connection with business of the hotelier. He can reasonably expect to get more custom and earn larger profit by charging higher rates for the use of rooms if the bathrooms have sanitary fittings and similar amenities. We are unable to see how the sanitary fittings in the bathrooms in a hotel will not be 'plant' within section 10(2)(vi-b) read with section 10(5) when it is quite clear that the intention of the Legislature was to give it a wide meaning and that is why articles like books and surgical instruments were expressly included in the definition of 'plant'. In decided cases,....