N.N.MATHUR, J. - (1.) BY this common order three reference applications being D.B. IT Ref. No. 10 of 1992 [CIT vs. Lake Palace Hotels & Motels (P) Ltd.] D.B. IT Ref. No. 102 of 1998 [Ajit Bhawan Hotel vs. CIT (for asst. yr. 1984-85)] and D.B. IT Ref. No. 103 of 1998 [Ajit Bhawan Hotel vs. CIT (for asst. yr. 1987-88)] are being disposed of.
(2.) THE common question involved in these three reference applications is as to whether hotel building can be treated as plant or industrial undertaking and, therefore, the assessee is entitled to investment amount (sic-allowance) under S. 32A of the IT Act. The controversy involved stands concluded by recent decision of the apex Court in CIT vs. Anand Theatres (2000) 160 CTR (SC) 492 : (2000) 244 ITR 192 (SC), wherein the Court has held that hotel building and theatre building are separate from industrial undertaking or the plant in spite of the fact that they are specially equipped for the purpose of business, they still remain building and as such not entitled to depreciation at the rate applicable to plant under S. 32 of the IT Act. However, Mr. Anjay Kothari learned counsel appearing for the assessee, has sought to distinguish the case of M/s Ajit Bhawan Hotel from the decision of the Supreme Court in Anand Theatres on the ground that the scheme of s. 32A of the IT Act is different. It is submitted that the provisions of ss. 32 and 32A of the Act operate in different fields and the intended object of both the provisions are also different and, therefore, the ratio of Anand Theatres's case shall not be applicable while interpreting S. 32A. The learned counsel also placed reliance on a recent decision of the apex Court in CIT vs. Dr. B. Venkata Rao (2000) 160 CTR (SC) 489 : (2000) 243 ITR 81 (SC), wherein it is held that a building in which nursing home was running is a plant because the nursing home building was specially equipped with assessee's business. The learned counsel has also referred to the decision of the apex Court rendered after Anand Theatres case in CIT vs. Karnataka Power Corporation (2000) 162 CTR (SC) 249. It is necessary to acquaint with the development in IT Ref. No. 10 of 1992. The said reference application along with D.B. IT Ref. No. 6 of 1987 CIT vs. Payal Theatre, Shri Ganganagar, and D.B. IT Ref. No. 20 of 1992-CIT vs. Ratan & Co. was heard by the Division Bench consisting of Y.R. Meena, J. and V.K. Singhal, J. The judgment was prepared by Hon'ble Singhal, J. The judgment was pronounced on 14th Nov., 1995, by the Bench consisting of B.R. Arora, J. and B.J. Shethna, J. The reference was answered in favour of the Revenue and against the assessee. After the judgment was delivered the assessee Lake Palace Hotels & Motels Ltd., Udaipur, presented a misc. application, which was registered as D.B. Civil Misc. Appln. No. 58 of 1996 on 13th Dec., 1995, pointing out that the reference could not have been heard by the Bench consisting of Y.R. Meena, J. as his lordship was one of the Members of the Bench of the Tribunal, which decided the appeal in favour of the assessee by order dt. 2nd Sept., 1988. The Division Bench allowed the said application by order dt. 20th July, 1998, on the ground that Hon'ble Mr. Justice Y.R. Meena, and Hon'ble Mr. Justice, V.K. Singhal could not constitute the Bench in view of their Lordships transfer to other High Courts. Accordingly the judgment dt. 14th Nov., 1995, was recalled and the case was posted for fresh hearing. This is how D.B. IT Ref. No. 10 of 1992-CIT vs. Lake Palace Hotels & Motels Ltd. has come before us today for rehearing. It is interesting to notice that in fact nothing has been left for us to rehear as the judgment which has been recalled by the order of this Court dt. 20th July, 1998, has been reported in CIT vs. Lake Palace Hotels & Motels (1996) 130 CTR Page 2 of 3CTR 27/12/2010file://C:\PROGRAM FILES\html\matter3.htm (Raj) 585 : (1997) 226 ITR 561 (Raj) : TC S27.2814. This case has been followed in number of cases by this Court and has been extensively discussed and approved by the apex Court in Anand Theatres case (supra).
(3.) AS regard the contention raised by Mr. Anjay Kothari distinguishing Anand Theatres case has also been dealt with by this Court in CIT vs. Lake Palace Hotels & Motels (P) Ltd. (2001) 167 CTR (Raj) 169 : R.L.W. 2001 (3) Raj. 1359. This Court while dealing with all the cases referred by Mr. Anjay Kothari concluded as follows : "From the above, it can be seen that a person engaged in the business as hotelier cannot be said to be a person engaged in the business of manufacture or production of an article or a thing, but is a person who is engaged in the business of providing service. The investment of capital in installing any plant or machinery for the purposes of a business of providing service cannot be considered as investment in an industrial undertaking engaged in manufacture or production of any article or thing. Hence, on its own provision of S. 32A are not attracted". ;