Itr/83/1999 Of The Commissioner Of Income Tax v. M.mani

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR THURSDAY, THE 21ST FEBRUARY 2008 / 2ND PHALGUNA 1929 ITR.No. 83 of 1999() -------------------- AGAINST THE ORDER IN.RA.229-A/COCH/94 IN ITA.47/COCH/1992 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPLICANT: ----------- THE COMMISSIONER OF INCOME TAX, TRIVANDRUM. BY ADV. SRI.P.K.R.MENON(SR.),SC FOR IT SRI.GEORGE K. GEORGE, SC FOR IT RESPONDENTS: ------------- M. MANI, SUNITHA PRODUCTIONS, POURNAMI, VANCHIYOOR, TRIVANDRUM. BY THIS TAX REFERENCE HAVING BEEN FINALLY HEARD ON 21/02/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C .N. RAMACHANDRAN NAIR &T.R. RAMACHANDRAN NAIR, JJ. -------------------------------------------- I.T.R. No. 83 OF 1999 -------------------------------------------- Dated this the 21st day of February, 2008 JUDGMENT C.N. Ramachandran Nair,J. The question raised is whether the "studio building" is entitled todepreciation at the rate applicable to "plant". In order to grantdepreciation claimed by the assessee, the building in respect of whichdepreciation is claimed has to answer the description of "plant". ThisCourt in NAVODAYA'S case, 271 I.T.R. 173 held that studio buildingconstructed for film shooting is entitled to depreciation as "plant".However, the specific finding in that case was that Tribunal membersalong with departmental representative and assessee's representative onvisit of the building noticed that building is not a static one but couldbe adjusted depending upon requirements of the location for the movie.In this case there is no finding by any authority that the building is ofany special nature to treat it as a plant. In fact in ANANDTHEATRE'S case, 244 I.T.R. 192, the Supreme Court held that building housing the theatre, hotel, etc., do not constitute "plant" asdefined under the Act. The building in this case is a normal structureand is not entitled to depreciation as "plant" irrespective of whether it isused for film shooting or not. On the other hand, if the building is sucha flexible one that it could be modified or adjusted to suit therequirement of any film shooting or occasion, then it can be called"plant". Since there is no finding in the orders of the Tribunal that thebuilding involved in this case is a peculiar one, as found by theTribunal in Navodaya's case, we decline to answer the question, but setaside the order of the Tribunal and remand the matter back to theTribunal for fresh finding after getting details of facts about the natureof activities, the material used in the construction and the design, etc.ofthe RC building. If the building is of the type found in the Navodaya'scase, then the Tribunal will grant depreciation treating it as "plant". Onthe other hand, if it is an ordinary structure, the building does notqualify for grant of depreciation as "plant" as held by the SupremeCourt in ANAND THEATRE's case, no matter there may be someinternal arrangement for setting. It is for the Tribunal to get facts on record and decide the matter, and if required they are free to remand thematter to the assessing officer to verify and decide the issue. A copy of this judgment under the seal of the High Court andsignature of the Registrar shall be forwarded to the Income-taxAppellate Tribunal, Cochin Bench, Cochin. (C.N.RAMACHANDRAN NAIR)Judge. (T.R.RAMACHANDRAN NAIR) Judge. kk