TaxTMI 
TaxTMI 
1989 (5) TMI 96
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....med depreciation of 10 per cent on hotel building contending that it should be treated as plant in view of the Supreme Court's decision in the case of CIT v. Taj Mahal Hotel [1971] 82 ITR 44. The ITO stated that, by any stretch of imagination, the hotel building could not be treated as plant. Accordingly he rejected the assessee's claim for treatment of hotel building as plant. He allowed depreciation according to the rates permissible for hotel building. Aggrieved by the orders of the ITO the assessee carried the matter before the CIT(A). 3. Before the CIT(A), none was present on behalf of the assessee. Hence he decided the appeals on merits and allowed the assessee's appeals observing as under : "In CIT v. Taj Mahal Hotel [1971] 82 ITR ....
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....ppellate Tribunal in the case of Hotel Srilekha (P.) Ltd. v. Third ITO [1983] 5 ITD 541. There is no definition of 'plant' in the Income-tax Act, 1961. Section 43(3) is only an inclusive definition according to which plant includes ships, vehicles, books, scientific apparatus and surgical equipment used for the purpose of business of profession. Table of rates at which depreciation is admissible (Appendix-I, Part-I) as per rule 5 of Income-tax Rules, 1962 prescribed different rates of depreciation for buildings, furniture and fittings and machinery and plant. Thus it would be seen that the Income-tax Rules prescribed two different categories such as, building and plant for the purposes of depreciation. The CIT(A) referred to the decision of....
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....omers to resort to and enjoy. The Supreme Court in the case of Taj Mahal Hotel at page 48 held that it cannot be denied that the business of a hotelier is carried on by adapting a building or premises in a suitable way to be used as a residential hotel where visitors come and stay and where there is arrangement for meals and other amenities are provided for their comfort and convenience. The CIT(A) is justified in holding the hotel building as the assessee's tool of trade and that there was no prohibition to treat a hotel building as a plant for the purpose of depreciation. In these facts and circumstances the orders of CIT(A) should be upheld. 6. We have considered the rival submissions and the case law cited before us. It is an admitted ....
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....business may be totally different e.g. an ordinary commercial office. In the latter case, it may merely be a part of the building or setting in which the business is carried on and not the apparatus with which the business is carried on CIT v. Bank of India Ltd. [1979] 118 ITR 809 at page 819 (Bom.). The Gujarat High Court in the case of CIT v. Elecon Engg. Co. Ltd. [1974] 96 ITR 672 at page 698 held as under : "The word 'plant', in its ordinary meaning, is a word of wide import and in the context of section 32 it must be broadly construed. It includes any article or object, fixed or movable, live or dead, used by a businessman for carrying on his business. It is not necessarily confined to an apparatus which is used for mechanical operati....