TMI Blog2001 (9) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... ned senior counsel contended that once the electrical installations are embedded in the building and the sanitary fittings are fitted on to the bath rooms attached to the hotel rooms, they become part of the building and, therefore, higher initial depreciation provided for under section 32(1)(v) of the Income-tax Act, 1961, hereinafter referred to as "the Act", as it stood during the assessment year, should have been allowed in respect of those fittings as well. It was submitted that the Supreme Court in the case of CIT v. Taj Mahal Hotel [1971] 82 ITR 44, 49 has recognised such fittings as capable of being regarded as "plant" for the purpose of development rebate, even though the assessee therein had claimed depreciation under the head "Fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... running a hotel and the items in respect of which the claim was made for development rebate were items which were used in the building in which the hotel was run. If the building itself was to be regarded as plant, it would have been unnecessary for the court to proceed further to examine as to whether the sanitary and pipeline fittings which are essential for the hotel building to constitute plant. The court did not hold that the building in which a hotel was run was a plant. It was only held that the sanitary fittings were one of the essential amenities which are normally Provided in any good hotel and such fittings, having regard to the wide meaning required to be given to the word 'plant', were to be regarded as 'plant'." The apex co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remain "plant" only even when they are installed in a building used as a hotel. The Tribunal was right in the view that it took that such fittings are not eligible for initial depreciation as they cannot be regarded as falling within the scope of the term "building" used in section 32 of the Act. The question referred to us, viz., "Whether, on the facts and in the circumstances of the case, the Tribunal is justified in law in disallowing the claim for initial depreciation under section 32(1)(v) of the Income-tax Act, 1961, in respect of electrical installations and sanitary fittings embedded in the hotel building itself?" is, therefore, answered in favour of the Revenue and against the assessee. - - TaxTMI - TMITax - Income Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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