TaxTMI 
TaxTMI 
1992 (1) TMI 71
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....Rs. 5,78,500 on plant and machinery installed during the accounting year. A reserve of Rs. 3,75,000 was created for this purpose. The Incometax Officer was of the view that the hotel was not entitled to investment allowance and, for, the reasons discussed in the last year's assessment, order, the Income-tax Officer disallowed the assessee's claim for investment allowance. Being aggrieved, the assessee appealed to the Commissioner of Income-tax (Appeals) who confirmed the action of the Income-tax Officer on the point. The matter then went to the Tribunal. The Tribunal, following the assessee's own case for the earlier year set aside the order of Commissioner of Income-tax (Appeals) remanded the matter to the Incometax Officer with a direction to reconsider the assessee's claim for investment allowance in accordance with the earlier direction given by the Tribunal. In respect of the earlier assessment order, the Tribunal directed the Income-tax Officer to examine the claim of the assessee and to allow investment allowance only on such machinery and plant as are required for manufacturing or processing of goods. Before us, the same contentions have been reiterated. Under s....
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....Ltd. v. CIT [1984] 145 ITR 387. In that case, the assessee, who carried on the business of purchasing tea of different qualities and blending the same by mixing one type with another, claimed that it was an industrial company within the meaning of section 2(7)(c) of the Finance Act, 1978, and was entitled to concessional rate of tax. This court held that the assessee was an industrial company entitled to this benefit. There, this court considered in detail the meaning of the word "processing". There, this court followed the decision of the Supreme Court in the case of Chowgule and Co. Ltd. v. Union of India [1981] 47 STC 124 ; AIR 1981 SC 1014. The question involved before the Supreme Court was whether blending of ore of different qualities for obtaining ore of requisite specification amounted to processing within the contemplation of the Central Sales Tax Act. The Supreme Court observed that though the blending of different qualities of ore possessing differing chemical and physical composition so as to produce ore of the contractual specifications could not be said to involve the process of manufacture since the ore that was produced could not be regarded as a commercially new....
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....nt allowance. The contention of Mr. Poddar, learned counsel for the assessee, however, is that it is true that the running of a restaurant is an integral part of the business of a five-star hotel. It is true that it is mainly engaged in the business of hotel, but it has also to run the restaurant for the guests. In the restaurant, food is served which involves processing of articles as held in the case of Shy Room Pvt. Ltd. [1992] 195 ITR 763 (Cal). He has also submitted that the decision of the Kerala High Court in Casino (Pvt.) Ltd. [1975] 91 ITR 289 has no application to the facts of this case, as, there, the question was whether the assessee was an industrial company or not and, in determining that question, the court was of the view that the main activity of the assessee was hotel business and, accordingly, it was not entitled to be treated as an industrial company, because, after all, the, hotel is a trading concern. We have considered the rival contentions. The decision of the Kerala High Court in Casino (Pvt.) Ltd. [1973] 91 ITR 289, to our mind, gives the clue to the answer in this case as well. There is no dispute that the said decision was rendered in the contex....
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....on-manufacturing or non-producing or even non-processing concern and is a trading concern. This will also be clear from the provisions of section 8OJ (now repealed) or section 80-1 or section 80HH. In all these sections, the business of a hotel is treated as a business distinct and separate from an industrial undertaking manufacturing or producing articles. In all these sections, the business of a hotel has been of a category different from a manufacturing or producing undertaking. It is no doubt true that a hotel also produces eatables from raw materials like vegetables, meat, fish, spices and so on, for catering to the needs of the customers. But such manufacturing or production of goods that may be involved therein is only incidental or ancillary to the business of hotel-keeping. Apart from meals, a hotel provides entertainment and various personal services, with halls for drinking, dancing, exhibitions and group meetings with shops having both inside and street side entrances and offering for sale items such clothes, gifts, candy, theatre tickets, travel tickets. These are also ancillary activities, but do not fall in the activity of manufacture or production. The basic i....