- (1.) These appeals filed by the revenue are against the separate orders of the CIT (A) dated 31-12-1986 for the assessment years 1978-79, 1981-82 and 1982-83. As the point involved is common in all these appeals, they are being disposed of by a consolidated order for the sake of convenience.
(2.) The assessee companys business consists of export of cast iron goods and running of Hotel East Coast at Haldia. The assessee claimed depreciation of 10 per cent on hotel building contending that it should be treated as plant in view of the Supreme Courts 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 assessees 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 assessees appeals observing as under : In CIT v. Taj Mahal Hotel, 1971 82 ITR 44, the Supreme Court referred to the meaning of plant in Websters Dictionary as under : Land, building, machinery, apparatus and fixtures employed in carrying on trade or other industrial business.......... and approved it. Dealing with the narrow question whether sanitary and pipelines fittings constituted plant the court held that the asset in question were required by the nature of hotel business. In other words the Supreme Court has confirmed the view that when a building is required to carry on the hotel business it constitutes plant. There cannot be a hotel business without a hotel building. The building itself is one of the tools of trade and thereby constitutes plant. Without the building it is not possible for the assessee to carry on the hotel business. Thus as per functional test hotel building constitutes a plant. As the classification of building in the depreciation schedules do not take into account a building which functions as the tool of trade, there is no prohibition to treat a hotel building as a plant, for the purpose of ascertaining the rate of depreciation. This was the ruling given in Hotel Srilekha (P.) Ltd. v. Third ITO,1983 5 ITD 541. Respectfully, the above decisions are followed. Against the said orders of the CIT (A), the revenue field the present appeals before the Tribunal.;