N.N.MATHUR, J. - (1.) THE instant reference under Section 256(1) of the Income -tax Act, 1961, at the instance of the Revenue is referred by the Income - tax Appellate Tribunal, Jaipur, for seeking opinion of this court on the following question : 'Whether the Tribunal was right in treating sanitary fittings as plant installed in the cinema hall on the analogy of the Supreme Court's decision in CIT v. Taj Mahal Hotel : [1971]82ITR44(SC) ?'
(2.) THE reference is required to be considered in the background of specific provision granting depreciation to building, machinery and plant under Section 32 of the Income -tax Act, 1961, and the decision of the apex court in CIT v. Taj Mahal Hotel : [1971]82ITR44(SC) . The respondent -assessee, Jodhan Real Estate Development Company (P.) Ltd., Jodhpur, is having source of income, as per the return filed, from dealing in the real estate business and exhibiting films at its own cinema hall, namely, Darpan Cinema. For the assessment year 1986 -87, the assessee claimed depreciation on sanitary fittings at the rate of 15 per cent. The Assessing Officer held that sanitary fittings are a part of the building and, therefore, granted depreciation only to the extent of 5 per cent. allowable for building. The Commissioner of Income -tax (Appeals) held that the assessee was entitled to claim depreciation at the rate of 15 per cent. on sanitary fittings installed under the head 'Furniture and fittings'. The Revenue preferred an appeal against the judgment of the Commissioner of Income -tax (Appeals) before the Income -tax Appellate Tribunal, Jaipur. The Tribunal relying on the decision of the apex court in CIT v. Taj Mahal Hotel : [1971]82ITR44(SC) held that the sanitary fittings fitted in the hotel are plant. In the opinion of the Tribunal, cinema hall when put to functional test stands on the same footing as hotel and hence the assessee is entitled to depreciation at the rate of 15 per cent. on the sanitary fittings fitted in the cinema hall owned by him.
(3.) IT is submitted by Mr. Sandeep Bhandawat, learned counsel for the Revenue, that following the decision in Taj Mahal Hotel's case : [1971]82ITR44(SC) , the Legislature amended the definition of plant in Section 43(3) of the Act by the Finance Act of 1995, as such the said decision has no application to the facts of the case. On the other hand, it is submitted by Mr. Rajendra Mehta, learned counsel for the respondent -assessee, that even after the amendment the apex court in CIT v. Anand Theatres : [2000]244ITR192(SC) has approved its earlier decision in Taj Mahal Hotel's case : [1971]82ITR44(SC) . It is submitted that the controversy involved is concluded by the said decision of the apex court.;