COMMISSIONER OF INCOME TAX Vs. DAMODAR CORPORATION

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal acting on the order dated April 11, 1991 (see [1992] 193 ITR 272), of this court in O. P. No. 10709 of 1987 has placed the following question for our answer (at page 273) :

(2.) THE assessee is a firm carrying on business in the name and style of "Hotel Pankaj". THE assessment year under consideration is 1982-83. What was contended by the assessee was that the entire hotel complex has to be treated as a plant for the purpose of a claim for depreciation and that too at a flat rate of 15 per cent. On this basis an amount of Rs. 5,89,080, is claimed as depreciation.

(3.) THIS was endorsed by the first appellate authority--the Commissioner of Income-tax (Appeals), on both counts. It appears that the first appellate authority referred to the decision of the apex court in CIT v. Taj Mahal Hotel [1971] 82 ITR 44, in which business of hotel with reference to installed sanitary and pipeline fittings in one of its branches. A claim for depreciation allowance specifically under the head "Furniture and fittings" came up for consideration in regard to which, the question was whether the sanitary and pipeline fittings installed fell within the definition of "plant" in the assessment proceedings under the Indian Income-tax Act, 1922, by virtue of the provisions of Section 10(5) thereof. The apex court held that the items fell within the definition of the word "plant" with reference to the sanitary and pipeline fittings. The first appellate authority has devoted serious consideration to the understanding of the term "plant", basically with an approach that the best known and the most .generally invoked meaning of the term has to be attempted.