TMI Blog1997 (10) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... g used for Hotel is in the nature of Plant and machinery. While doing so, he relied upon the decision in its own case against which the department has filed the reference application before the Madras High Court which is still pending. The Commissioner of Income-tax (Appeals) allowed the claim of the assessee for higher rate of depreciation. Against the order of the Commissioner of Income-tax (Appeals), the department is in appeal before us. 3. The learned Departmental Representative argued that Hotel building is ordinary building and cannot be considered as plant or machinery which alone is entitled for the claim of higher rate of depreciation. In support of this, he relied upon the decision of the Rajasthan High Court in the case of CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar year for which it is made." 5. Again in 1971 the Apex Court in the case of CIT v. Brijlal Lohia Mahabir Prasad Khemka [1972] 84 ITR 273 at page 277 held as under: "The fact that in the earlier proceedings the Tribunal took a different view of those deeds not a conclusive circumstance. The decision of the Tribunal reached during these proceedings does not operate as res judicata As seen earlier there was a great deal more evidence before the Tribunal during the present proceedings, relating to these gift deeds." On the principle of res judicata the Patna High Court in the case of Jhaverbhai Patel v. CIT [1976]103 ITR 728 has also followed the principles of the Supreme Court in the case of Brij Lal Lohia . The Calcutta High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for depreciation along with the rules and the Schedule of depreciation rates, we would find that for the purpose of taxation, building, non-factory or factory, are generally treated as buildings even though the extensiveness of the meaning of the word 'plant' can also embrace them as a species of plant. Where the Legislature treats a particular species differently from the rest under a genus, the scope for bringing that species under the generic description for the purpose of allowing depreciation is not permissible. Law requires that buildings irrespective of their use and function shall qualify for depreciation as buildings and not as plant. There are certain extreme cases where the plant and machinery of the assessee is inseparably inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... temperature is not 'plant'. (iii) In order to find out whether a particular item is plant or not, the meaning which is available in the popular sense, i.e., the sense which people conversant with the subject-matter would attribute to it has to be taken. (iv) The term 'plant' would include any article or object, fixed or movable, live or dead, used by a businessman for carrying on his business and it is not necessarily confined to any apparatus which is used for mechanical operations or process or is employed in mechanical or industrial business. The article must have some degree of durability, (v) The building in which the business is carried on cannot be considered to be plant. (vi) The item should be used as a tool of the trade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 32 is concerned. Clause (3) of section 43 defines plant which reads plant includes ships, vehicles, books; scientific apparatus and surgical equipment used for the purposes of the business or profession (but does not include 'tea bushes or livestock)' This definition is inclusive and whatever mentioned therein alone can be treated as plant. This definition does not mention building and hence building of any type cannot be considered as plant or machinery for the purpose of depreciation at higher rate which applies to the case of Hotel business also. In view of the above discussion, the appeal filed by the Revenue is allowed and the order passed by the Commissioner of Income-tax (Appeals) is reversed. 10. In the result, the appeal is allo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
