TMI Blog2009 (2) TMI 193X X X X Extracts X X X X X X X X Extracts X X X X ..... he concession was not intended to be given to trading concerns. – hotel business not entitled for concession - Admittedly, the assessee runs a hotel. It cannot be said that it engaged in Construction work nor can it be said that by running hotel it manufactures any article or thing. Hotel is made for lodging and boarding. No plant and machinery exist in hotel, which is referred to in section for the purpose of benefit under section 32A of the Act. – Higher rate of depreciation not allowed - 37 to 42 of 1988 - - - Dated:- 26-2-2009 - R. C. GANDHI ACTG. C. J. and M. N. BHANDARI J. J. K. Ranka for the assessee. R. B. Mathur for the Commissioner. JUDGMENT 1. In reference petitions Nos. 37 of 1988, 38 of 1988 and 42 of 1988, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the Income-tax Appellate Tribunal. Before the Tribunal, the judgment of the Kerala High Court in CIT v. Casino P. Ltd. [1973] 91 ITR 289 was relied upon which weighed with the Tribunal and the Tribunal held that the assessee does a hotel business which is nothing but production of articles and there is no difference between production of articles and processing of goods and recorded the findings in favour of the assessee. The reference has arisen under these circumstances. 4. The first question is, whether the Tribunal was justified in holding that the assessee is (not ?) an industrial company in terms of section 2(7)(c) of the Finance Act, 1978. This issue came for consideration before the Bombay High Court in the case title ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e matter. It is true that such activity has been held to be 'manufacturing process' as defined under section 2(k) of the Factories Act. But, it is a well known canon of interpretation of statutes that the meaning given to the words in one statute cannot be automatically imported for interpretation in another statute. All depends upon the purpose of the Act and the context in which the words appear." 5. On the second issue, learned counsel for the Revenue has submitted that the references wherein the opinion of the court is solicited are not res integra. These questions have already been settled by this court and by the Supreme Court. He has invited the attention of the court on a judgment of this court delivered in the cause title C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d produce any article or thing. When the assessee does not produce any article or thing nor is engaged in construction business, nor is engaged in the business of generating power, in our view, the Tribunal has wrongly treated the assessee as an industrial undertaking nor can the hotel building be treated as plant and machinery." 6. Similar was the question before the apex court in cause title Indian Hotels Co. Ltd. v. ITO [2000] 245 ITR 538. The assessee therein sought the benefit of investment allowance under section 32 of the Act contending that the assessee is an industrial undertaking engaged in manufacturing activity. The claim was rejected by the Tribunal holding that the assessee cannot be considered to be an industrial comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d it cannot be held to be a business of manufacture or production of any article or thing." 8. The third question is, whether assessee is entitled to higher rate of depreciation on the theatre whereas herein is a hotel. Dealing with this proposition of the third issue, the Supreme Court in the cause title CIT v. Anand Theatres [2000] 244 ITR 192, observed as under (page 244): "In the result, it is held that the building used for running of a hotel or carrying on cinema business cannot be held to be a plant because : (1) The scheme of section 32 as discussed above clearly envisages separate depreciation for a building machinery and plant, furniture and fittings, etc. The word 'plant' is given inclusive meaning under section 43(3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... form its function. (5) Even in England, courts have repeatedly held that the meaning of the word 'plant' given in various decisions is artificial and imprecise in application, that is to use the words of Lord Buckley, 'it is now beyond doubt that the word "plant" is used in the relevant section in an artificial and largely judge-made sense'. Lord Wilberforce commented by stating that 'no ordinary man, literate or semi-literate, would think that a horse, a swimming pool, movable partitions, or even a dry-dock was plant.' (6) For the hotel building and hospital in the case of Carr v. Sayer 65 TC 15 (Ch.D.), it has been observed that a hotel building remains a building even when constructed to a luxury specification and similarly a hospita ..... X X X X Extracts X X X X X X X X Extracts X X X X
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