1998 (7) TMI 19

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....nder section 32(1)(iia) of the Income-tax Act, 1961, in respect of the machinery leased out to approved hotels by the company. The assessee is a leasing company which leased out equipment to its customers, some of whom are hotels. The extra depreciation allowance has been claimed in respect of machinery leased to hotels, solely on the ground that hotels are entitled to such depreciation as the machinery is used in the hotel. This claim of the assessee has been negatived, and rightly so, by the Tribunal. Under the provisions of section 33 of the Income-tax Act such extra depreciation allowance can be claimed in respect of machinery installed and used in a hotel only when it is used by the assessee. The hotel also has to be an approved hot....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

..... Whether the Tribunal was correct in law and on facts in holding that the assessee would not be disqualified from claiming the investment allowance under section 32A(5) of the Income-tax Act, 1961 ?" We may conveniently dispose of questions Nos. 2 to 5 as the answer to those questions has been settled by the decision of the Supreme Court in CIT v. Shaan Finance (P.) Ltd. [1998] 231 ITR 308. The Supreme Court in that case which also concerns this assessee, held that notwithstanding the fact that the assessee is a leasing company and the plant and machinery leased out by it are not used by the assessee in any industry the assessee is entitled to investment allowance We answer questions Nos. 2 to 5 referred to us at the instance of the ....