Grover, J. - (1.) This is an appeal by certificate from the judgment of the Andhra Pradesh High Court in a case referred under S. 66 (1) of the Income Tax Act, 1922 (hereinafter referred to as the Act).
(2.) The respondent who is the assessee is a registered firm running a hotel at Secunderabad with branches at Sultan Bazar and King Kothi in Hyderabad. During the previous year ending 30th September, 1959 relating to the assessment year 1960-61, the assessee incurred an expenditure of Rs. 57,154/- in installing sanitary fittings and of Rs. 1,370/- for pipe-line fittings. The assessee claimed development rebate on these two items at the rate of 25 per cent under S. 10 (2) (vi-b) of the Act amounting in the aggregate to Rs. 14,639/-. The Income Tax Officer disallowed the claim. On appeal, the Appellate Assistant Commissioner upheld the disallowance. An appeal was taken to the Appellate Tribunal. The Tribunal rejected the appeal holding that the definition of "plant" must necessarily be the same, whether it was for claiming depreciation under S. 10 (2) x(vi) or for development rebate under S. 10 (2) (vi-b). Accordingly, it was held that the sanitary and pipe-line fittings did not fall within the meaning of the word "plant". On being moved under S. 66 (1) of the Act, the following question was referred for the opinion of the High Court: "Whether the sanitary fitting and pipelines, installed in the King Kothi branch of the Hotel, constituted 'plant' within the meaning of S. 10 (5), of the Indian Income-tax Act and whether the assessee is entitled to development rebate in respect thereof under S. 10 (2) of the Act - The Tribunal answered the question in the affirmative and in favour of the assessee.
(3.) The only question that was argued before the High Court and which has been debated before us is whether sanitary and pipe-line fittings in a building which is run as a hotel would fall within the meaning of the word "plant" in section 10 (2) (vi-b) of the Act.;