The Commissioner Of Income Tax, (Central), Ludhiana v. M/S Raja Motels And Hotels (India) Pvt. Ltd

ITR No. 9 of 2000 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITR No. 9 of 2000 Date of Decision: 10.9.2010 The Commissioner of Income Tax, (Central), Ludhiana ....Petitioner. Versus M/s Raja Motels and Hotels (India) Pvt. Ltd. ...Respondent. CORAM:-HON'BLE MR. JUSTICE ADARSH KUMAR GOEL.HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Rajesh Katoch, Advocate for the petitioner. None for the assessee. ADARSH KUMAR GOEL, J. 1.Following question of law has been referred for opinion ofthis Court under Section 256(2) of the Income Tax Act, 1961 (in short“the Act”) by the Income Tax Appellate Tribunal, Amritsar Bench,Amritsar (hereinafter referred to as “the Tribunal”) arising out of its orderdated 15.7.1993 in ITA No. 620/ASR/87 in respect of assessment year1981-82:- “Whether, on the facts and in the circumstances ofthe case, the Income-tax Appellate Tribunal was rightin law in holding that the Hotel Building was a 'Plant'for the purpose of grant of depreciation?” The assessee is running a hotel and claimed depreciation on the building @ 2.5% applicable to depreciation on plants. It wasclaimed that the building itself was a plant of the hotel. This was notallowed by the Assessing Officer. The CIT (A) upheld the plea of theassessee relying upon the judgment of the Hon'ble Supreme Court inScientific Engineering House (P) Ltd. v. Commissioner of IncomeTax, [1986] 157 ITR 86 (SC) which has been affirmed by theTribunal.The observations of the Tribunal are as under:- “We have considered the rival submissions. Thepoint in dispute is covered in favour of the assesseeand against the Revenue as per the decision ofHon'ble Madras Bench, Calcutta Bench as well asDelhi Bench of the Tribunal as reported in 5 ITD 541,30 ITD 388 and 25 TTJ 456 (supra). The decisionrelied on by the Ld. DR in the case of R.C. ChemicalsInds. Vs. CIT (supra) is not applicable to the factsand circumstances of the case and has been rightlydistinguished by the Ld. CIT (A). The decision ofTribunal referred by Sh. Mehra holding the HotelBuilding to be a plant is in accordance with theprinciple laid down by the Hon'ble Supreme Court inthe case of Scientific Engg. House Pvt. Ltd. Vs. CITcited as (1986) 157 ITR 86 wherein the Hon'bleSupreme Court has even held drawings, designs,processing data also as plant.” 3.We have heard learned counsel for the revenue. Noneappears for the assessee. ITR No. 9 of 2000 4.Learned counsel for the revenue submits that the viewtaken by the Tribunal is erroneous and the judgment of the Hon'bleSupreme Court in Scientific Engineering House (P) Ltd's caserelates to drawings, designs and processing data which are differentfrom building. In respect of building, the Hon'ble Supreme Court hasheld in Commissioner of Income Tax v. Anand Theatres etc., [2000]244 ITR 192 (SC) that it was not plant for the purpose of depreciationunder Section 32 of the Act. We find this to be so. The matter iscovered in favour of the revenue. Following the judgment of the Hon'bleSupreme Court, the question referred is answered in favour of therevenue. 5.The reference is disposed of. (ADARSH KUMAR GOEL) JUDGE September 10, 2010gbs (AJAY KUMAR MITTAL)JUDGE