TaxTMI 
TaxTMI 
2006 (10) TMI 122
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....h 5, 2003, in I.T.A. No. 765/Mds/1995 for the assessment year 1992-93 on the file of the Income-tax Appellate Tribunal, Madras, following its earlier order dated April 11, 2002, referred to above. Hence, all the appeals were heard and disposed of together. The Revenue has preferred these appeals raising the following substantial question of law, "Whether, on the facts and circumstances of the case, the Tribunal was justified in directing higher depreciation at 20 per cent. in respect of structures let out and structures used by employees for residence, overlooking the fact that such structures are put non-hotel use?" under the common facts and circumstances of the case stated below. The assessee-company is running a hotel, viz.,....
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....ciation of any block of assets shall be calculated at the percentages specified in the second column of the Table in Appendix I to these rules on the written down value of such block of assets as are used for the purposes of the business or profession of the assessee at any time during the previous year. (2) ..." Item I of Appendix I, which deals with Table of rates at which depreciation is admissible, reads as under: ------------------------------------------------------------ "Block of assets Depreciation allowance &n....
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.... each with plinth area not exceeding 80 square metres (4) Purely temporary erections 100" such as wooden structures ------------------------------------------------------------ Even though the assessee claimed 20 per cent. depreciation of the entire building stating that the entire building is used as a hotel, the Assessing Officer, in his assessment order dated February 26, 1993, held that the assessee was using only 25 per cent. of the building for hotel purposes and th....
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....antique shops, emporium, art and crafts, florists, travels are not directly connected with the hotel business and the same was let out to third parties and therefore, the Assessing Officer is right in granting depreciation treating the said portion of the building referred for the above purpose as 25 per cent. of the building and allowing only 10 per cent. of depreciation applying sub-item (2) of item I of Appendix I read with rule 5(1) of the Rules for the balance 75 per cent. of the building. On the other hand, justifying the reasons and the findings rendered by the Commissioner and the Tribunal referred to above, learned counsel for the respondent contends that the Commissioner had rightly granted 20 per cent. depreciation to the whol....
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.... hotel. The word "hotel" is explained in the Encyclopedia Britannica as "Building that provides lodging, meals and other services to the travelling public on a commercial basis." Similarly, the word "hotel" is described in Merriam Webster Online Dictionary as "An establishment that provides lodging and usually meals and other services for travellers and other paying guests." Likewise, in Stroud's Judicial Dictionary of Words and Phrases, the word "hotel" has been stated as "An 'hotel' is a place where lodgings are let and where provisions are, to some extent, supplied." A Full Bench of the apex court, in Northern India Caterers (India) Ltd. v. Lt. Governor of Delhi [1978] 42 STC 386 where the appellant ran a hotel in which....
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....ty whether its customer avails of it or not. Therefore, what is important is whether the hotelier, apart from lodging and boarding facility, also provides other services to the travellers, paying guests and other travelling public to maintain the functional character of the hotel, viz., the hospitality. It is immaterial in the course of such hospitality whether such services are used by the visitors to the hotel also. An argument is also available for the Revenue to say that these facilities like health clinic, gymnasium centre, swimming pool, music, floor dance, restaurant, bank, antiques, florists, emporium, arts and crafts, facility of travelling agency would also be incidental use by casual visitors to the hotel. In our considered op....