Rc/48/1999 Of The Commissioner Of Income Tax Hyd v. N.mohan Krishna

THE HON’BLE SRI JUSTICE V.V.S.RAOANDTHE HON’BLE SRI JUSTICE B.N.RAO NALLAREFERRED CASE No.48 of 1999 Dated:08.12.2011 Between: Commissioner of Income Tax,A.P.I, Hyderabad. …Applicant and Shri N.Mohana Krishna, Hyderabad. …Respondent THE HON’BLE SRI JUSTICE V.V.S.RAOAND THE HON’BLE SRI JUSTICE B.N.RAO NALLA REFERRED CASE No.48 of 1999 ORDER:(Per Hon’ble Sri Justice V.V.S.Rao) In this Referred Case at the instance of theCommissioner of Income Tax, the Income Tax AppellateTribunal, Hyderabad Bench “B”, referred the followingquestion for the opinion of this Court. Whether on the facts and in thecircumstances of the case, the AppellateTribunal is right in law in holding that thetheatre building should be treated as ‘plant’for the purpose of higher depreciation? The brief facts are as follows. The assessee is anindividual owning a theatre and carrying on business mainly in exhibition of feature films, profession asCinematographer and was also deriving share incomefrom partnership firms. For the assessment year 1988-1999 the assessee filed returns of income and claimeddepreciation at the rate of 33-1/3% on theatre building. The Assessing Officer allowed depreciation on theatrebuilding at 10% as against the assessee’s claim of 33-1/3%. The appeal filed by the assessee was allowed. On further appeal by the Department, the Tribunalupheld the order of the Commissioner of Income Taxand dismissed the department’s appeal. The order of the Tribunal, not being acceptable tothe Revenue, the present application is filed at theirinstance. The question referred for the opinion of this Courtis covered by the judgment of the Supreme Court inCommissioner of Income Tax v Anand Theatres[[1]]. Therein the Supreme Court consideredthe question whether a hotel or cinema theatre can beconsidered to be an apparatus or tool for running thebusiness so that it can be termed as a ‘plant’ anddepreciation can be allowed accordingly or whether itremains ‘building’ wherein either hotel business orbusiness of cinema could be conducted. After referringto various provisions and relevant case law, theSupreme Court held that the building used as cinematheatre cannot be given benefit of depreciation as a‘plant’. In view of the decision of the Supreme Court inAnand Theatres the question is answered in the negative in favour of the Revenue and against theassessee. The Referred Case is disposed of accordingly. _______________(V.V.S.RAO, J) 08.12.2011vs ____________________(B.N.RAO NALLA, J) [1](2000) 244 IT R 192