1996 (8) TMI 74

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ion at 15 per cent. and investment allowance ?" The assessee is a firm carrying on business in the name and style of "Hotel Pankaj". The assessment year under consideration is 1982-83. What was contended by the assessee was that the entire hotel complex has to be treated as a plant for the purpose of a claim for depreciation and that too at a flat rate of 15 per cent. On this basis an amount of Rs. 5,89,080, is claimed as depreciation. However, the Income-tax Officer allowed permissible depreciation on certain individual items of capital nature and that too as per the prescribed rates under the Income-tax Rules. He worked out the figure on the count at Rs. 4,23,458 which could be considered for grant of depreciation. The assessee h....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e hotel as a complex which can be treated as a plant. In reaching this conclusion, the Tribunal placed reliance on the decision of the Income-tax Appellate Tribunal, Madras Bench, Hotel Srilekha (P.) Ltd. v. Third ITO [1983] 5 ITD 541, in the matter of Hotel Srilekha (P.) Ltd. The Tribunal has observed that the hotel virtually extends to a man's tools of trade which is a functional test and in the process the building would be such as an essential part of the overall trading activity of the assessee and in regard thereto the amenities would all go to offer to the customer, resort to and right to enjoy. The entire building would be the assessee's tool of trade without which the assessee cannot carry on his business would have to be unders....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e four sources, such as building, machinery, plant or furniture. The plain statutory language prohibits any scope for a contention that the entire building will have to be considered as a plant when buildings, machinery, plant or furniture are separate and distinct items and the claim for depreciation will have to be understood as referable to them individually and separately from each other. Similarly, section 32A of the Act makes a statutory provision relating to the investment allowance. In regard thereto also if any ship, aircraft or plant specified in section 32A(2) of the Act, is owned by the assessee and is wholly used for the purpose of business carried on by him, then and then alone, subject to the provisions of the said section....